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Computer graphics chipmaker Nvidia Corp. reportedly has won a bidding war to acquire hot Israeli startup called Mellanox Technologies Ltd. that had also caught the eye of Intel Corp. and Microsoft Corp.

Bloomberg and Reuters, citing “people familiar with the matter,” reported today that Nvidia will cough up a hefty $7 billion to acquire Mellanox. Update: The deal’s done. Check out the details in our updated story.

At that price it would become Nvidia’s largest-ever acquisition, dwarfing the $367 million it paid to acquire Icera Inc. in 2011. The chipmaker is reportedly interested in using Mellanox’s technology to boost its data center chip business to become less reliant on its primary business of selling graphics processing units for the videogame industry.

Nvidia reportedly outbid Intel to get its hands on Mellanox, and could announce the deal as early as Monday, according to Reuter’s sources. Intel’s interest in Mellanox first came to light in January. Microsoft was also reported to be considering a bid as early as last December, but it’s not clear if it actually tabled an offer. Another chipmaker, Xilinx Inc., was also reported to be interested.

If the deal is confirmed, Nvidia will be getting its hands on what is a fairly versatile startup. Mellanox primarily sells networking hardware based on the Ethernet and InfiniBand communications protocols, including cables and switches that are used to connect servers with storage systems.

Perhaps more interesting for Nvidia are the computer chips it sells. Used to power data center networking gear, they can be found in on-premises data centers, public cloud infrastructure and also supercomputers. The company is said to have a strong presence in that last market, with its networking tools and chips said to be used in more than half of the world’s top 500 most powerful supercomputers.

Mellanox’s chips are said to be especially useful for speeding up the transfer of data between components of computers. That’s significant, because the speed at which data can be analyzed is of crucial importance for enterprises that rely on fast insights to inform business decisions.

The acquisition would certainly give Nvidia a boost. The company currently gets about a third of its revenue from data center customers, but has seen its main gaming business suffer in recent weeks because of a slowdown in demand from China. Its also been hit by a fading cryptocurrency mining industry, which also relies on Nvidia GPUs. During its most recent quarterly financial report, the company was forced to slash its revenue guidance by $500 million thanks to these headwinds.

Analyst Patrick Moorhead of Moor Insights & Strategy told SiliconANGLE the acquisition, if it happens, would be a synergistic one because their technologies are complementary. “Both Nvidia and Mellanox are big in the high performance computing, machine learning, automotive, public cloud and enterprise data center markets, and could bring even more value to customers when [their technologies are] combined.”

“Scale and diversification is everything in the chip business, and Nvidia gets both with this acquisition,” added Holger Mueller, principal analyst and vice president of Constellation Research Inc. “It allows the company to scale and diversify from its existing graphics, gaming and AI use cases. Getting in the data center is vital with the overall move to the public cloud, so if this goes through, it means Nvidia will become more relevant for both executives and developers alike.”

Nvidia could still struggle to gain regulatory approval for the deal, Bloomberg reported. This process has become more difficult in recent months due to the trade war between the U.S. and China, which are the world’s biggest producer, and consumer of chips, respectively.

Last year, for example, Qualcomm Technologies Inc. withdrew its bid to acquire NXP Semiconductor N.V., citing endless delays from Chinese regulators. That came just a few months after U.S. President Donald Trump had blocked Broadcom Ltd.’s hostile takeover attempt of Qualcomm on national security concerns.

Image: Nvidia