Nvidia CEO Says Closing Mellanox $ 7 Billion Merger Is “Homerun Agreement”

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Nvidia CEO Jensen Huang, when he appeared on CNBC on Monday, described the long-awaited merger of chipmaker Mellanox Technologies as a crowning achievement.

“This is a homerun agreement,” he told Jim Cramer in a “Mad Money” interview. “Dude, I dream about it. “

The $ 7 billion acquisition has lasted more than 13 months since it was first announced in the first quarter of 2019 in the midst of a trade war between the U.S. and Chinese economic powers. Mellanox, an Israel-based provider of high-performance network computing, has Alibaba and Baidu in China as main customers.

Chinese regulators approved the deal on April 16, months after US and European authorities last year unconditionally agreed. Nvidia, known for its gaming graphics chips, is based in Santa Clara, California.

Nvidia is looking to strengthen its data center and artificial intelligence activity with Mellanox in order to compete with Intel.

“We combine the leaders in AI and high-speed networking and data processing in one company and, therefore, it’s really quite extraordinary,” said Huang, who has run the company for almost three years. decades.

The combination gives Nvidia end-to-end expertise in data center services, a larger footprint and a larger scale.

“With that, I hope we can, you know, accelerate innovation and create incredible things for data centers in the future,” he said.

Many commercial transactions between US and international companies with significant activities in China have been hampered by Chinese authorities in the past two years. The United States and China, the world’s two largest economies, engaged in a tit-to-tat trade war until a so-called phase 1 trade agreement eases trade tensions between the two. country.

Qualcomm notably abandoned a $ 44 billion takeover of its rival NXP Semiconductors in July 2018 after having encountered regulatory problems with China.

Nvidia shares climbed more than 2% to $ 297.08 during the session. The stock has been up 26% since the start of the year.

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