Advanced Micro Devices (AMD) has agreed to acquire ZT Systems, an artificial intelligence (AI) and general-purpose compute infrastructure provider for hyperscale computing companies, in a cash and stock deal worth $4.9bn. The consideration is inclusive of a contingent payment of up to $400m based on certain post-closing objectives.
“For almost 30 years we have evolved our business to become a leading provider of critical computing and storage infrastructure for the world’s largest cloud companies,” said ZT Systems’ chief executive, Frank Zhang. “AMD shares our vision for the important role our technology and our people play designing and building the computing infrastructure powering the largest data centers in the world.”
ZT Systems 101
Headquartered in New Jersey, ZT Systems is engaged in the supply of hyperscale server solutions for cloud computing and AI and boasts a global manufacturing operation spanning across the US, the EMEA and APAC regions. By acquiring ZT Systems, AMD aims to advance its AI strategy to offer leadership AI training and inferencing solutions based on innovation across silicon, software and systems.
Additionally, ZT Systems’ expertise in designing and optimising cloud computing solutions is expected to help cloud and enterprise customers expedite the deployment of AMD-driven AI infrastructure at scale.
“ZT adds world-class systems design and rack-scale solutions expertise that will significantly strengthen our data center AI systems and customer enablement capabilities,” said AMD chair and CEO Lisa Su. “This acquisition also builds on the investments we have made to accelerate our AI hardware and software roadmaps.
“Combining our high-performance Instinct AI accelerator, EPYC CPU, and networking product portfolios with ZT Systems’ industry-leading data center systems expertise will enable AMD to deliver end-to-end data center AI infrastructure at scale with our ecosystem of OEM and ODM partners.”
Upon the closing of the deal, ZT Systems will join the AMD Data Center Solutions Business Group. Zhang, said the semiconductor company, will lead the manufacturing business, while ZT Systems president Doug Huang will head up its design and customer enablement teams.
Additionally, AMD will pursue a strategic partner to acquire ZT Systems’ US-based data center infrastructure manufacturing business. Subject to regulatory approvals and other customary conditions, the transaction is expected to be completed in the first half of 2025.
AMD vs. Nvidia
AMD’s acquisition of ZT Systems represents a strategic effort to strengthen its AI capabilities. This move follows the firm’s significant advancements in AI throughout the year, including its $665m acquisition of Silo AI, a Finnish AI startup.
The acquisition was part of AMD’s broader strategy to enhance its competitiveness against Nvidia. The company’s AI initiatives were showcased at Computex 2024, where AMD introduced the Instinct MI325X accelerator and announced plans for the MI350 series, projected for release in 2025.
These developments are part of AMD’s efforts to bridge the competitive gap with Nvidia in the AI semiconductor market. In addition, AMD has not only ramped up its internal research and development (R&D) efforts but has also invested over $1bn over the past year in expanding its AI ecosystem and advancing its AI software capabilities.
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