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"Future data centers of all kinds will be built like high-performance computers," said Nvidia president Jensen Huang at a phone briefing on Monday after Nvidia revealed he had recovered Mellanox for 6, $ 9 billion.
If it's your vision – like Nvidia's – it's a very good reason to buy one of the world's leading HPC interconnection companies. Of course, there are also other reasons, play Keep-Mellanox away from Intel for once. Another idea that may not have been of concern to everyone is getting a foothold in Israel – even if you keep a close eye on space, you know how Israel is a hotbed of technological innovation.
But the main reason is Nvidia's conception of the changing strategic role and the changing architecture of the datacenter of the 2020s.
"Data centers are the most important computers in the world today and in the future – as workloads evolve under the leadership of artificial intelligence," Machine learning, data badysis and data science – future data centers of all types will be built as high-performance computers, "Huang said.
Enter Mellanox:
"We believe that in future data centers, the calculation will not start or end on the server, but will extend to the network. And the network itself, the fabric, will become part of the computer fabric. In the long run, I think we have the opportunity to create computing architectures across data centers; In the short term, Mellanox's footprint in data centers is quite large. […] We will be able to better manage this important market opportunity, "he said.
According to rumors, the tender process of Mellanox, launched last year under the pressure of the investment company Starboard activist (who had bought 10.7% of the capital of the company in November 2017 – see our coverage at the time), was very competitive and Intel was a very competitive business. best competitor. Huang did not want or could not confirm the information that Intel was in the mix. But he added that the call for bids was competitive because the interconnection – especially the smart interconnection – has become more important than ever, with a greater chunk of the load computer work done on the interconnection structure. The unloading approach is fundamental to Mellanox's technology strategy.
Huang also praised Mellanox's network style and "extraordinary" software that was "galvanized and integrated into a vast body of work over a long period of time".
In explaining the hot bidding process, he also pointed to the attractiveness of Israel, where the Mellanox headquarters are located. "It's a technological center: culture, people's spirit, the wealth of technical excellence make it a great place," he said. "This is one of the largest AI development centers and technology development centers in the world."
Together, with its very powerful GPUs, DGX machines, NVLink and NVSwitch development, and now an end-to-end interconnection portfolio, Nvidia is much more than just one. de facto systems society, a point that Huang essentially conceded, although he said he preferred the term "computer society to the scale of the data center".
"We were a GPU company, and then we became a GPU systems company. We have become a computer company that started from the chip, we are now expanding to a data center computing company, "he said.
Nvidia sees itself as a different style of society than other vertically integrated providers. "We create the whole architecture, but we build it so that we can collaborate with the entire IT ecosystem. We are composing our technology thinking of the scalability of a GPU to thousands of GPUs and, in the future, millions of GPUs. We think from the point of view of scalability and compatibility, which allows us to offer our components to the entire information technology sector, so that all world can build computers and configurations that appeal to him and solve their problems, "Huang said. .
"Our business model will not change, although we continue to grow in the sensitivity of the systems; we are not a systems company, if you will. We are really a systems architecture company, "added Huang, highlighting the distinction. "We are open to partnering with our customers and partners as they see fit. If they want to bundle our DGX servers such as NetApp, Pure and DDN, we are looking forward to it. If they want to buy our HGX motherboard, essentially the system board of our DGX, to put it in their cloud, like what Google has done and Microsoft and others have done, we are delighted. If you want to buy our chips and build your own systems, we are looking forward to it or if you want to buy it as an expansion card. We work very hard to make sure that they are all compatible, so that the CUDA acceleration libraries work perfectly well above all else. "
This is one of the reasons for the cautious and cautious statements, the coverage vis-à-vis Nvidia that is entering the systems business – and this is something we've heard from Addison Snell, CEO of Intersect360 Research. "Nvidia needs to be careful that its aspirations do not threaten its important server-side partners. While Nvidia can sell components and reference architectures directly to very large companies and ODMs, they should not take for granted the traditional OEM channel. "
The only missing element in a complete system stack at Nvidia is the versatile processor. Nvidia had intended to get into the CPU game since 2011 with Project Denver, but abandoned those plans. With the soaring Arm and Arm looking for partners to manufacture its Neoverse chips, many are thinking that this is the next natural step for Nvidia.
But Huang, questioned about it, seemed less excited about the processors – as a market opportunity. He reiterated his position that the company believed in serial processing (recognizing "we can not do everything in parallel"), while affirming that while Nvidia is pleased to work closely with all major processor companies – IBM, AMD and yes, Intel (but that's just not true) and Cavium / Marvell, Ampere and Broadcom on the Arm side – focusing more on engineering activities that can provide "x improvement factors "has many advantages.
"I think if we were to spend a lot of R & D on processor construction today, the x factor you get, after five years, is about 15% – and [the CPU makers] Battle over 15 percent! Huang said, "And as they do such a good job with over 15% conflict, we could invest our R & D in the areas that attract the greatest number of factors – places where people do not invest. And I think accelerated computing has been severely under-invested and our return there has been fantastic, and it will continue to be fantastic and improve. "
Getting back to the Mellanox deal is largely a strategic buy from the market watchers.
"Nvidia's $ 10 billion investment compared to Mellanox's $ 1 billion suggests that Nvidia sells a lot more customers, has a wider sales / distribution channel and a global service infrastructure," said a long-time observer of the sector we talked about. "Through economies of scale, the mere fact of placing the Mellanox product line in Nvidia's portfolio should significantly boost the Mellanox business sector." This could be the main reason why they paid nearly $ 7 billion. They examined Mellanox's state-of-the-art technology, taken into account in their customers and their channels, and estimated the sales opportunity over a period of typically three to five years. Nvidia must feel that it can bring the Mellanox business unit to $ 7 billion over the next three to five years and improve its core products. "
On the tech side, Snell noted that "the combination of Nvidia and Mellanox intrigues for HPC and AI. The companies are respective leaders in their high-performance technology areas, and each has experienced strong growth. Nvidia's acquisition of Mellanox not only creates potential synergies for the advancement of high bandwidth connections for accelerated systems, but also protects technologies from Intel, which is a natural competitor of both companies. "
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