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American technology giant Nvidia will acquire Israeli chipmaker Mellanox in a deal worth $6.9 billion, the companies announced on Monday.The Yokne’am-based company, founded in 1999 and listed on the Nasdaq Stock Market, supplies end-to-end interconnect solutions and services for many of the world’s largest data center servers and storage systems.Nvidia’s purchase of the company, acquiring all issued and outstanding common shares for $125 per share in cash, puts an end to months of reported takeover attempts by some of the world’s biggest hi-tech firms, including Intel, Microsoft and Xilinx.Together, Nvidia and Mellanox will power more than 250 of the world’s TOP500 most powerful supercomputers. The transaction has been approved by the boards of directors of both companies and is expected to close by the end of the calendar year.The hefty $6.9b. price tag, constituting a 14% premium on Mellanox’s closing share price on Friday, represents the third largest “exit” of an Israeli company to date, only surpassed by Intel’s $15.3b. acquisition of Mobileye and International Flavors & Fragrances’ $7.1b. acquisition of Frutarom.“The emergence of AI and data science, as well as billions of simultaneous computer users, is fueling skyrocketing demand on the world’s data centers,” said founder and CEO of Nvidia Jensen Huang.“Addressing this demand will require holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant data center-scale compute engine.”Since its establishment two decades ago, Mellanox has been dual-headquartered in Israel and the United States. Today, it boasts operations from Israel’s South to its North, with offices in Yokne’am, Tel Aviv, Beersheba, Ra’anana and Tel Hai.“We share the same vision for accelerated computing as Nvidia,” said Mellanox founder and CEO Eyal Waldman. “Combining our two companies comes as a natural extension of our longstanding partnership and is a great fit given our common performance-driven cultures. This combination will foster the creation of powerful technology and fantastic opportunities for our people.”Once the acquisition is complete, Nvidia intends to continue investing in Israeli talent, citing the country as “one of the world’s most important technology centers.”Nvidia also says it plans to work with Mellanox to optimize data center-scale workloads and achieve higher performance, greater utilization and lower operating costs for customers.While Nvidia first made its name by revolutionizing computer graphics through its graphics processing units (GPU), it has evolved in recent years to powering processors at the forefront of deep learning and artificial intelligence solutions.“The Israeli economy has never been so strong,” said Finance Minister Moshe Kahlon following the announcement.“The success of Mellanox is another sign of respect for the Israeli economy and a source of great pride for the hi-tech industry. The company’s employees have proved the talent and entrepreneurialism of the Israeli worker,” Kahlon said. “Despite all the black prophets, Israel’s economy is strong and prosperous and we will continue to win for the benefit of all the Israeli people and the state.”