AMD CEO: ZT Systems Buy For $4.9B Is Our ‘Next Major Step’ In AI

“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,” said AMD CEO Lisa Su.

Chipmaker superstar AMD is acquiring server supplier and cloud computing specialist ZT Systems for $4.9 billion in a blockbuster move to take AMD’s artificial intelligence portfolio to the next level.

“Our acquisition of ZT Systems is the next major step in our long-term AI strategy to deliver leadership training and inferencing solutions that can be rapidly deployed at scale across cloud and enterprise customers,” said AMD CEO Lisa Su in a statement today.

Secaucus, N.J.-based ZT Systems has approximately 2,500 employees and generates annual revenue of around $10 billion. On Monday, AMD signed a definitive agreement to acquire ZT Systems.

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“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 Su. “This acquisition also builds on the investments we have made to accelerate our AI hardware and software roadmaps.”

The deal is expected to be finalized by the end of 2025.

AMD’s Integration Plan For ZT Systems

This acquisition will provide AMD with industry-leading systems expertise to accelerate deployment of optimized rack-scale solutions that address a $400-billion data center AI opportunity by 2027, according to AMD.

The acquisition is the next major step in AMD’s AI strategy to deliver leadership AI training and inferencing solutions based on innovation across silicon, software and systems.

ZT Systems’ experience in designing and optimizing cloud computing solutions will also aid cloud and enterprise customers significantly by accelerating the deployment of AMD-powered AI infrastructure at scale.

“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,” said Su.

AMD Will Buy ZT Systems’ Data Center Infrastructure

AMD will seek a strategic partner to acquire ZT Systems’ U.S.-based data center infrastructure manufacturing business.

Following the deal’s closure, ZT Systems will join the AMD Data Center Solutions Business Group.

ZT’s CEO Frank Zhang will lead the manufacturing business, while ZT’s President Doug Huang will lead the design and customer enablement teams.

The Details Of The Deal

AMD plans to pay for 75 percent of the acquisition with cash and the remainder in stock.

The chipmaker had approximately $5.3 billion in short-term investments and cash as of the second quarter 2024.

AMD’s stock is up 4 percent today before the market opening, trading at around $152.30 per share.