AMD: Completed $4.9B ZT Systems Buy Gives Us ‘Rack-Level Expertise’ For AI Solutions

Marking a new chapter in AMD’s competition against Nvidia, the chip designer says its ZT Systems acquisition, completed Monday, will allow it to combine ‘industry-leading systems’ and ‘rack-level expertise’ with its silicon to offer a ‘new class of end-to-end AI solutions.’

AMD said it will combine “industry-leading systems” and “rack-level expertise” from the chip designer’s $4.9 billion acquisition of ZT Systems with its portfolio of processors and networking silicon to offer a “new class of end-to-end AI solutions.”

The Santa Clara, Calif.-based company on Monday said that it had completed its acquisition of AI and general-purpose computing infrastructure provider ZT Systems, which was announced last August as a way for the chip designer to better compete with AI computing giant Nvidia in data centers, particularly among hyperscalers and enterprises.

While AMD has significantly ramped up its investments to compete against Nvidia’s AI computing prowess with its Instinct data center GPUs and open-source ROCm software over the past few years, the company’s revenue in this area was a small fraction of Nvidia’s last year, with AMD’s Instinct chips generating $5 billion versus the $102.2 billion of Nvidia’s data center computing business, which includes GPUs.

Lisa Su, AMD’s CEO, has declined to offer an Instinct revenue forecast for 2025—unlike what she did for the previous year—instead saying in the company’s most recent earnings call that the product segment will generate tens of billions of dollars in the “coming years.”

With the deal’s closing, ZT Systems’ design and customer enablement teams will join AMD’s data center solutions business, which is led by Executive Vice President Forrest Norrod. These will be led by former ZT Systems President Doug Huang, who will work closely with Norrod’s group and AMD’s AI group for new data center AI solutions.

AMD said it is “actively engaged with multiple potential partners to acquire” ZT Systems’ data center infrastructure manufacturing business this year, as it originally intended. These efforts will be led in part by former ZT Systems founder and CEO Frank Zhang, who has joined AMD as senior vice president of ZT Manufacturing.

In a statement, Norrod said the ZT Systems acquisition will allow AMD to reduce the time it takes to design and deploy “cluster-level” data center AI systems for customers.

“Acquiring ZT Systems is a significant milestone in our AI strategy to deliver leadership training and inferencing solutions that are optimized for our customers’ unique environment, ready-to-deploy at scale, and based on our open ecosystem approach that combines open-source software, industry standard networking technologies and now ZT Systems’ leadership systems design and customer enablement expertise,” he said.

Originally valued at $4.9 billion last August, the transaction consisted of 8.3 million shares of AMD common stock and $3.4 billion to ZT Systems’ sellers, according to an AMD document filed Monday with the U.S. Securities and Exchange Commission.

AMD plans to offer the sellers an additional 740,961 shares of AMD common stock and $300 million in cash once certain conditions are met, the document added.