Nvidia’s CEO does not plan any further acquisitions after the Mellanox deal

Authors: Steven Scheer and Tova Cohen

TEL AVIV (Reuters) – U.S. chip supplier Nvidia Corp has no plans to make further acquisitions for now after its nearly $7 billion purchase of Israeli chip designer Mellanox Technologies, its chief executive said on Tuesday.

“I like having money, so I’m going to save it for a while,” Jensen Huang said at a Kalkalist business conference in Tel Aviv. “This is a great acquisition. I’m not looking for another one.”

Earlier this month, Nvidia agreed to buy Mellanox for $6.8 billion, beating out rival Intel Corp in a deal intended to help the company grow its data center and artificial intelligence (AI) businesses.

“Everyone wanted it,” Huang said. Asked if he had paid too much, he replied, “It’s beyond imagination.”

“But the company has created amazing technology and has a great future ahead of it,” he said.

Nvidia, once known as a supplier of gaming chips, now also provides chips that speed up AI tasks such as training servers to recognize images. Mellanox makes the chips that connect these servers in the data center.

“Our strategy is that we want to double the number of data centers. The future of computing is very much focused on data centers,” Huang said.

Nvidia gets about a quarter of its revenue from data centers, and sales in that segment of $2.9 billion in 2018 grew 52 percent year over year.

Huang noted that once the deal with Mellanox is signed, which is expected to be finalized by the end of the year, there will be no cost cutting and the Mellanox brand will be maintained.

“We intend to keep every product line. We intend to retain every employee,” he said, noting that he plans to expand Mellanox’s operations in Israel. “There is no overlap or cost synergies.”

Huang said investors were initially cautious about the acquisition. However, since the deal was announced on March 11, Nvidia’s shares have risen 15 percent to $173.80.

(Editing by Mark Potter)