AMD to Acquire ZT Systems for $4.9 Billion, Expanding AI Data Center Ecosystem

AMD to acquire server builder ZT Systems for $4.9 billion

AMD on Monday said it plans to acquire server maker ZT Systems for $4.9 billion as the company seeks to expand its portfolio of artificial intelligence chips and hardware and battle Nvidia. AMD plans to pay for 75 per cent of the ZT Systems acquisition with cash and the remainder in stock. The company had $5.34 billion in cash and short-term investments as of the second quarter. The computing requirements for AI have dictated that tech companies string together thousands of chips in clusters to achieve the necessary amount of data crunching horsepower. Stringing together the vast numbers of chips has meant the makeup of whole server systems has become increasingly important, which is why AMD is acquiring ZT Systems. AMD's shares climbed nearly 3 per cent in premarket trading. "AI systems are our number one strategic priority," AMD CEO Lisa Su said in an interview with Reuters. The addition of ZT Systems engineers will allow AMD to more quickly test and roll out its latest AI graphics processing units (GPUs) at the scale cloud computing giants such as Microsoft require, Su said. "The main way (ZT Systems) is additive to the company is we sell more GPUs," Su said. AMD plans to break off its server manufacturing business and sell it once the deal closes, as it has no plans to compete with companies such as Super Micro Computer, Su said. AMD expects ZT Systems to contribute to the company's adjusted financial performance by the end of 2025.

AMD to Acquire ZT Systems for $4.9B for Expanding AI Data Centres Ecosystem

AMD plans to sell ZT Systems' data center infrastructure manufacturing arm to a "strategic partner." AMD, in a strategic move to strengthen its AI ecosystem, announced the acquisition of ZT Systems for $4.9 billion. The deal, involving both cash and stock, includes an additional contingent payment of up to $400 million based on performance metrics. ZT Systems, a New Jersey-based company specializing in compute design and infrastructure for AI, cloud, and general-purpose computing, will be integrated into AMD's computing infrastructure design business. AMD plans to sell ZT Systems' data center infrastructure manufacturing arm to a "strategic partner." The company also works closely with NVIDIA and Intel. AMD, which has already invested $1 billion in its broader ecosystem, sees this acquisition as pivotal in enhancing its expertise in AI systems design, encompassing silicon, software, and systems. "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," stated AMD chair and CEO, Dr. Lisa Su. ZT Systems' CEO, Frank Zhang, will lead AMD's manufacturing business, while President Doug Huang will oversee design and customer enablement teams, reporting to AMD's executive vice president, Forrest Norrod. The deal is expected to finalize in the first half of 2025. "We are excited to join AMD and together play an even larger role designing the AI infrastructure that is defining the future of computing," said Frank Zhang, CEO of ZT Systems. "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. 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." Last month, AMD announced that it has signed a definitive agreement to acquire Silo AI, which completed just last week, in an all-cash transaction valued at approximately $665 million. The acquisition is expected to close in the second half of 2024, subject to regulatory approvals. The acquisition of ZT Systems is the latest move by AMD to bolster its AI capabilities. Over the past year, alongside ramping up organic R&D efforts, AMD has invested over $1 billion to grow its AI ecosystem and enhance its AI software expertise.

AMD to acquire server builder ZT Systems for $4.9 billion in cash and stock

Aug 19 (Reuters) - AMD (AMD.O), opens new tab on Monday said it plans to acquire server maker ZT Systems for $4.9 billion as the company seeks to expand its portfolio of artificial intelligence chips and hardware and battle Nvidia (NVDA.O), opens new tab. AMD plans to pay for 75% of the ZT Systems acquisition with cash and the remainder in stock. The company had $5.34 billion in cash and short-term investments as of the second quarter. The computing requirements for AI have dictated that tech companies string together thousands of chips in clusters to achieve the necessary amount of data crunching horsepower. Stringing together the vast numbers of chips has meant the makeup of whole server systems has become increasingly important, which is why AMD is acquiring ZT Systems. AMD's shares climbed nearly 3% in premarket trading. "AI systems are our number one strategic priority," AMD CEO Lisa Su said in an interview with Reuters. The addition of ZT Systems engineers will allow AMD to more quickly test and roll out its latest AI graphics processing units (GPUs) at the scale cloud computing giants such as Microsoft (MSFT.O), opens new tab require, Su said. "The main way (ZT Systems) is additive to the company is we sell more GPUs," Su said. AMD plans to break off its server manufacturing business and sell it once the deal closes, as it has no plans to compete with companies such as Super Micro Computer (SMCI.O), opens new tab, Su said. AMD has not yet held talks with potential buyers. ZT Systems Chief Executive Frank Zhang will join AMD and report to AMD's data center chief, Forrest Norrod. The closely held ZT Systems has roughly 2,500 employees of which AMD plans to retain about 1,000 engineers. Currently ZT Systems generates annual revenue of roughly $10 billion, Su said. Executives expect the deal to close in the first half of 2025 and expect an additional 12 to 18 months to sell the manufacturing business. Nvidia CEO Jensen Huang said at the company's developer conference in March that the one-time chip designer now creates and sells entire data centers, or the individual components needed to build one. This year analysts expect the company to generate $105.9 billion from its data center segment, which includes chips and other AI hardware. Su said last month the company expects to collect roughly $4.5 billion worth of AI chip revenue this year. The company's customers include Microsoft and Meta Platforms (META.O), opens new tab. AMD expects ZT Systems to contribute to the company's adjusted financial performance by the end of 2025. Reporting by Max A. Cherney in San Francisco; Editing by Chris Reese Our Standards: The Thomson Reuters Trust Principles., opens new tab

AMD to acquire server builder ZT Systems for $4.9 billion in cash and stock

The computing requirements for AI have dictated that tech companies string together thousands of chips in clusters to achieve the necessary amount of data crunching horsepower. Stringing together the vast numbers of chips has meant the makeup of whole server systems has become increasingly important, which is why AMD is acquiring ZT Systems. "AI systems are our number one strategic priority," AMD CEO Lisa Su said in an interview with Reuters. The addition of ZT Systems engineers will allow AMD to more quickly test and roll out its latest AI graphics processing units (GPUs) at the scale cloud computing giants such as Microsoft require, Su said. "The main way (ZT Systems) is additive to the company is we sell more GPUs," Su said. AMD plans to break off its server manufacturing business and sell it once the deal closes, as it has no plans to compete with companies such as Super Micro Computer, Su said. ZT Systems Chief Executive Frank Zhang will join AMD and report to AMD's data center chief, Forrest Norrod. The closely held ZT Systems has roughly 2,500 employees of which AMD plans to retain about 1,000 engineers. Currently ZT Systems generates annual revenue of roughly $10 billion, Su said. Executives expect the deal to close in the first half of 2025 and expect an additional 12 to 18 months to sell the manufacturing business. Nvidia CEO Jensen Huang said at the company's developer conference in March that the one-time chip designer now creates and sells entire data centers, or the individual components needed to build one. This year analysts expect the company to generate $105.9 billion from its data center segment, which includes chips and other AI hardware. Su said last month the company expects to collect roughly $4.5 billion worth of AI chip revenue this year. The company's customers include Microsoft and Meta Platforms. AMD expects ZT Systems to contribute to the company's adjusted financial performance by the end of 2025. (Reporting by Max A. Cherney in San Francisco; Editing by Chris Reese)

AMD to acquire server builder ZT Systems for $4.9bln in cash and stock

AMD on Monday said it plans to acquire server maker ZT Systems for $4.9 billion as the company seeks to expand its portfolio of artificial intelligence chips and hardware and battle Nvidia. AMD plans to pay for 75% of the ZT Systems acquisition with cash and the remainder in stock. The company had $5.34 billion in cash and short-term investments as of the second quarter. The computing requirements for AI have dictated that tech companies string together thousands of chips in clusters to achieve the necessary amount of data crunching horsepower. Stringing together the vast numbers of chips has meant the makeup of whole server systems has become increasingly important, which is why AMD is acquiring ZT Systems. "AI systems are our number one strategic priority," AMD CEO Lisa Su said in an interview with Reuters. The addition of ZT Systems engineers will allow AMD to more quickly test and roll out its latest AI graphics processing units (GPUs) at the scale cloud computing giants such as Microsoft require, Su said. "The main way (ZT Systems) is additive to the company is we sell more GPUs," Su said. AMD plans to break off its server manufacturing business and sell it once the deal closes, as it has no plans to compete with companies such as Super Micro Computer, Su said. AMD has not yet held talks with potential buyers. ZT Systems Chief Executive Frank Zhang will join AMD and report to AMD's data center chief, Forrest Norrod. The closely held ZT Systems has roughly 2,500 employees of which AMD plans to retain about 1,000 engineers. Currently ZT Systems generates annual revenue of roughly $10 billion, Su said. Executives expect the deal to close in the first half of 2025 and expect an additional 12 to 18 months to sell the manufacturing business. Nvidia CEO Jensen Huang said at the company's developer conference in March that the one-time chip designer now creates and sells entire data centers, or the individual components needed to build one. This year analysts expect the company to generate $105.9 billion from its data center segment, which includes chips and other AI hardware. Su said last month the company expects to collect roughly $4.5 billion worth of AI chip revenue this year. The company's customers include Microsoft and Meta Platforms. AMD expects ZT Systems to contribute to the company's adjusted financial performance by the end of 2025. (Reporting by Max A. Cherney in San Francisco; Editing by Chris Reese)

AMD to acquire server builder ZT Systems for $4.9 billion in cash and stock

AMD on Monday said it plans to acquire server maker ZT Systems for $4.9 billion as the company seeks to expand its portfolio of artificial intelligence chips and hardware and battle Nvidia. AMD plans to pay for 75% of the ZT Systems acquisition with cash and the remainder in stock. The company had $5.34 billion in cash and short-term investments as of the second quarter. The computing requirements for AI have dictated that tech companies string together thousands of chips in clusters to achieve the necessary amount of data crunching horsepower. Stringing together the vast numbers of chips has meant the makeup of whole server systems has become increasingly important, which is why AMD is acquiring ZT Systems. AMD's shares climbed nearly 3% in premarket trading. "AI systems are our number one strategic priority," AMD CEO Lisa Su said in an interview with Reuters. The addition of ZT Systems engineers will allow AMD to more quickly test and roll out its latest AI graphics processing units (GPUs) at the scale cloud computing giants such as Microsoft require, Su said. "The main way (ZT Systems) is additive to the company is we sell more GPUs," Su said. AMD plans to break off its server manufacturing business and sell it once the deal closes, as it has no plans to compete with companies such as Super Micro Computer, Su said. AMD has not yet held talks with potential buyers. ZT Systems Chief Executive Frank Zhang will join AMD and report to AMD's data center chief, Forrest Norrod. The closely held ZT Systems has roughly 2,500 employees of which AMD plans to retain about 1,000 engineers. Currently ZT Systems generates annual revenue of roughly $10 billion, Su said. Executives expect the deal to close in the first half of 2025 and expect an additional 12 to 18 months to sell the manufacturing business. Nvidia CEO Jensen Huang said at the company's developer conference in March that the one-time chip designer now creates and sells entire data centers, or the individual components needed to build one. This year analysts expect the company to generate $105.9 billion from its data center segment, which includes chips and other AI hardware. Su said last month the company expects to collect roughly $4.5 billion worth of AI chip revenue this year. The company's customers include Microsoft and Meta Platforms. AMD expects ZT Systems to contribute to the company's adjusted financial performance by the end of 2025. Read Comments

AMD to acquire ZT Systems in $4.9B deal to boost data center AI systems capabilities

Advanced Micro Devices (NASDAQ:AMD) is acquiring AI infrastructure provider ZT Systems in a cash and stock deal worth about $4.9B. The transaction value includes a contingent payment of up to $400M based on certain post-closing milestones. AMD noted that it will seek a strategic partner to acquire ZT Systems' U.S.-based data center infrastructure manufacturing business. The acquisition will help AMD expand data center and AI systems capabilities, the company noted. AMD said Secaucus, N.J.-based ZT Systems' experience in designing and optimizing cloud computing solutions will help cloud and enterprise customers accelerate the deployment of AMD-powered AI infrastructure at scale. The transaction marks the next major step in its AI strategy to deliver leadership AI training and inferencing solutions based on innovating across silicon, software and systems, according to AMD. "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 Chair and CEO Lisa Su. After the transaction closes, ZT Systems will join the AMD Data Center Solutions Business Group. ZT CEO Frank Zhang will lead the manufacturing business and ZT President Doug Huang will lead the design and customer enablement teams. In the last one year, besides increasing organic R&D activities, AMD has invested over $1B to expand the AMD AI ecosystem and strengthen the company's AI software capabilities, AMD noted. AMD expects the transaction to be accretive on a non-GAAP basis by the end of 2025. The acquisition is expected to close in the first half of 2025.

AMD to acquire server builder ZT Systems for $4.9 billion in cash and stock

Lisa Su, president and CEO of AMD, talks about the AMD EPYC processor during a keynote address at the 2019 CES in Las Vegas, Nevada, U.S., January 9, 2019. Advanced Micro Devices on Monday said it plans to acquire server maker ZT Systems for $4.9 billion as the company seeks to expand its portfolio of artificial intelligence chips and hardware and battle Nvidia. AMD plans to pay for 75% of the ZT Systems acquisition with cash and the remainder in stock. The company had $5.34 billion in cash and short-term investments as of the second quarter. The computing requirements for AI have dictated that tech companies string together thousands of chips in clusters to achieve the necessary amount of data crunching horsepower. Stringing together the vast numbers of chips has meant the makeup of whole server systems has become increasingly important, which is why AMD is acquiring ZT Systems. "AI systems are our number one strategic priority," AMD CEO Lisa Su said in an interview with Reuters. The addition of ZT Systems engineers will allow AMD to more quickly test and roll out its latest AI graphics processing units (GPUs) at the scale cloud computing giants such as Microsoft require, Su said. "The main way (ZT Systems) is additive to the company is we sell more GPUs," Su said. AMD plans to break off its server manufacturing business and sell it once the deal closes, as it has no plans to compete with companies such as Super Micro Computer, Su said. AMD has not yet held talks with potential buyers. ZT Systems Chief Executive Frank Zhang will join AMD and report to AMD's data center chief, Forrest Norrod. The closely held ZT Systems has roughly 2,500 employees of which AMD plans to retain about 1,000 engineers. Currently, ZT Systems generates annual revenue of roughly $10 billion, Su said. Executives expect the deal to close in the first half of 2025 and expect an additional 12 to 18 months to sell the manufacturing business. Nvidia CEO Jensen Huang said at the company's developer conference in March that the one-time chip designer now creates and sells entire data centers, or the individual components needed to build one. This year analysts expect the company to generate $105.9 billion from its data center segment, which includes chips and other AI hardware. Su said last month the company expects to collect roughly $4.5 billion worth of AI chip revenue this year. The company's customers include Microsoft and Meta Platforms. AMD expects ZT Systems to contribute to the company's adjusted financial performance by the end of 2025.

AMD Acquires ZT Systems in Major $4.9 Billion Deal to Enhance AI Portfolio

AMD announced the signing of a definitive agreement to acquire ZT Systems, a leading provider of AI infrastructure for the world's largest hyperscale computing companies. The strategic transaction marks the next major step in AMD's AI strategy to deliver leadership AI training and inferencing solutions based on innovating across silicon, software and systems. ZT Systems' extensive experience designing and optimizing cloud computing solutions will also help cloud and enterprise customers significantly accelerate the deployment of AMD-powered AI infrastructure at scale.

AMD to acquire infrastructure player ZT Systems for $4.9B to amp up its AI ecosystem play | TechCrunch

AMD, the chipmaker hot on the heels of Nvidia in the AI computing race, today announced a big acquisition to boost its position as an "ecosystem" partner for companies building big artificial intelligence computing businesses: it announced that it will acquire ZT Systems, which provides compute design and infrastructure for so-called "hyperscalers" (the biggest technology firms) for AI, cloud and more general purpose computing, for $4.9 billion. The deal is a mix of cash and stock and includes what AMD describes as a contingent payment of up to $400 million if certain performance metrics are met. The plan will be to incorporate ZT Systems' computing infrastructure design business. AMD has already said it will look to sell ZT Systems' data center infrastructure manufacturing business to "a strategic partner". ZT Systems has been privately held since it was founded in 1994. It's based out of New Jersey and has only one external raise disclosed, $850 million in debt in 2023, according to PitchBook data. It works closely big competitors in chips such as Nvidia and Intel, building solutions with both over the years. It covers areas such as server solution design for areas like compute, storage, GPU/accelerators, high performance compute, 5G and edge computing. The deal will give AMD a deeper bench of expertise specifically around AI systems design involving not just silicon, but software and systems, the company said, which could help AMD sell more of its chips and systems powered by its chips to customers overall. AMD says that it's already invested, prior to this, some $1 billion in building out its bigger ecosystem. There is a business need for that enhanced approach, too. As AI systems increase in complexity, one big priority for big tech companies building and operating them will be to increase the efficiency of their systems for the most compute-heavy aspects them, such as AI model training and inferencing when live data is run through those models. "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 Chair and CEO Dr. Lisa Su in a statement. "ZT adds world-class systems design and rack-scale solutions expertise that will significantly strengthen our data center AI systems and customer enablement capabilities. 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." ZT Systems does not disclose the names of its clients, but it appears to have increased its profile in more recent years for providing specialist support in some of the thorniest and most expensive aspects of designing AI computing architecture. Its CEO Frank Zhang will lead AMD's manufacturing business and ZT Systems will become a part of AMD's Data Center Solutions Business Group. "We are excited to join AMD and together play an even larger role designing the AI infrastructure that is defining the future of computing," said Zhang, CEO of ZT Systems, in a statement. "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. 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 President Doug Huang will lead the design and customer enablement teams, and both will report to AMD Executive Vice President and General Manager Forrest Norrod, the company said.

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 CEOLisa 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. [Related: Why AMD And Supermicro Will Ship Systems Without CPUs] "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. This acquisition will provide AMD with industry-leading systems expertise to accelerate deployment of optimized tack-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's experience 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 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 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-terms investments and cash as of second quarter 2024. AMD's stock is up 4 percent today before the market opening, trading at around $152.30 per share.

AMD to acquire ZT Systems in $4.9bn deal By Investing.com

AMD (NASDAQ:AMD) has announced Monday that it has signed an agreement to acquire ZT Systems, a leading provider of AI infrastructure, in a cash and stock transaction valued at $4.9 billion. This strategic acquisition aims to bolster AMD's capabilities in data center AI systems, addressing the growing $400 billion data center AI accelerator opportunity expected by 2027. ZT Systems, based in Secaucus, New Jersey, has over 15 years of experience designing and deploying data center AI compute and storage infrastructure for major global cloud companies. The acquisition will bring ZT Systems' expertise in designing and optimizing cloud computing solutions into AMD's fold, enhancing its ability to deliver end-to-end AI infrastructure at scale. AMD CEO Dr. Lisa Su highlighted that this acquisition is a significant step in AMD's long-term AI strategy, stating, "ZT adds world-class systems design and rack-scale solutions expertise that will significantly strengthen our data center AI systems and customer enablement capabilities." "This acquisition also builds on the investments we have made to accelerate our AI hardware and software roadmaps." Following the acquisition, ZT Systems will become part of AMD's Data Center Solutions Business Group. ZT's CEO Frank Zhang will oversee the manufacturing business, while President Doug Huang will lead design and customer enablement teams, both reporting to AMD Executive Vice President Forrest Norrod. AMD plans to seek a strategic partner to acquire ZT Systems' U.S.-based data center infrastructure manufacturing business as it focuses on expanding its AI hardware and software roadmap. The transaction, expected to close in the first half of 2025, is anticipated to be accretive on a non-GAAP basis by the end of 2025.

AMD Is Spending $4.9 Billion To Buy This Server Company To Rival Nvidia's AI March

AMD on Monday said it plans to acquire server maker ZT Systems for $4.9 billion as the company seeks to expand its portfolio of artificial intelligence chips and hardware and battle Nvidia. (Reuters) -AMD on Monday said it plans to acquire server maker ZT Systems for $4.9 billion as the company seeks to expand its portfolio of artificial intelligence chips and hardware and battle Nvidia. AMD plans to pay for 75% of the ZT Systems acquisition with cash and the remainder in stock. The company had $5.34 billion in cash and short-term investments as of the second quarter. The computing requirements for AI have dictated that tech companies string together thousands of chips in clusters to achieve the necessary amount of data crunching horsepower. Stringing together the vast numbers of chips has meant the makeup of whole server systems has become increasingly important, which is why AMD is acquiring ZT Systems. AMD's shares climbed nearly 3% in premarket trading. "AI systems are our number one strategic priority," AMD CEO Lisa Su said in an interview with Reuters. The addition of ZT Systems engineers will allow AMD to more quickly test and roll out its latest AI graphics processing units (GPUs) at the scale cloud computing giants such as Microsoft require, Su said. "The main way (ZT Systems) is additive to the company is we sell more GPUs," Su said. AMD plans to break off its server manufacturing business and sell it once the deal closes, as it has no plans to compete with companies such as Super Micro Computer, Su said. AMD has not yet held talks with potential buyers. ZT Systems Chief Executive Frank Zhang will join AMD and report to AMD's data center chief, Forrest Norrod. The closely held ZT Systems has roughly 2,500 employees of which AMD plans to retain about 1,000 engineers. Currently ZT Systems generates annual revenue of roughly $10 billion, Su said. Executives expect the deal to close in the first half of 2025 and expect an additional 12 to 18 months to sell the manufacturing business. Nvidia CEO Jensen Huang said at the company's developer conference in March that the one-time chip designer now creates and sells entire data centers, or the individual components needed to build one. This year analysts expect the company to generate $105.9 billion from its data center segment, which includes chips and other AI hardware. Su said last month the company expects to collect roughly $4.5 billion worth of AI chip revenue this year. The company's customers include Microsoft and Meta Platforms. AMD expects ZT Systems to contribute to the company's adjusted financial performance by the end of 2025.

AMD to buy ZT Systems as AI competition with Nvidia fires up

CEO Dr Lisa Su said that buying ZT Systems marks the 'next major step' in AMD's long-term AI strategy. US semiconductor giant AMD has agreed to acquire New Jersey-based ZT Systems for $4.9bn as it ramps up efforts to challenge Nvidia's dominance in AI infrastructure. ZT Systems creates servers and data centre infrastructure that help in the development of AI systems. AMD hopes the acquisition will complement its silicon and software capabilities. The cash and stock deal valued at $4.9bn includes a contingent payment of up to $400m based on certain post-closing milestones. AMD expects to complete the acquisition in the first half of 2025. AMD chair and CEO Dr Lisa Su said that buying ZT Systems marks the "next major step" in the company's long-term AI strategy to deliver leadership training and inferencing solutions. "ZT adds world-class systems design and rack-scale solutions expertise that will significantly strengthen our data centre AI systems and customer enablement capabilities," Su said. "This acquisition also builds on the investments we have made to accelerate our AI hardware and software roadmaps." The acquisition comes just a month after AMD acquired Silo AI, which claims to be the largest private artificial intelligence lab in Europe, in a deal worth approximately $665m. Based in Helsinki, Finland, Silo AI specialises in AI solutions that help customers integrate the emerging technology into their products, services and operations. It also creates open-source multilingual LLMs, such as Poro and Viking, on AMD platforms in addition to its SiloGen model platform. AMD is one of the largest chipmakers in the US and a rival to the likes of Intel, IBM and Nvidia. It has seen profits surge of late thanks to the soaring global demand for AI chips. Other recent acquisitions include French AI software company Mipsology and US open-source software company Nod.ai. Frank Zhang, CEO of ZT Systems, said that the latest deal will allow the company to play an even larger role "designing the AI infrastructure that is defining the future of computing". "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," Zhang said. "AMD shares our vision for the important role our technology and our people play designing and building the computing infrastructure powering the largest data centres in the world." Find out how emerging tech trends are transforming tomorrow with our new podcast, Future Human: The Series. Listen now on Spotify, on Apple or wherever you get your podcasts.

Why AMD Is Buying Server Maker ZT Systems

AMD is buying ZT Systems to strengthen its expertise in server systems. The acquisition focuses on services and support, including approximately 100 system design engineers. AMD plans to sell the manufacturing portion of ZT Systems after closing, as this business is low margin and puts AMD in direct competition with its customers. AMD's primary objective is to acquire the systems expertise needed to meet the growing needs of its large hyperscale customers, who buy complex systems rather than individual components. This acquisition is a recognition by AMD of its need to enhance its capabilities to remain competitive with competitors such as NVIDIA. AMD has already invested in a number of areas to complement its offering, including the purchase of networking company Pensando and AI software companies. The addition of the ZT Systems engineers is intended to reinforce this strategy. AMD hopes the additional expertise will enable it to sell more GPUs in the future. The acquisition, valued at around $4.9 billion before the sale of the manufacturing part, is primarily a talent acquisition deal. AMD is investing to integrate these skills and close the gap with its competitors, who already have well-integrated systems developed in-house.

AMD Expands AI Portfolio With $4.9B Purchase of ZT Systems

CEO Dr. Lisa Su said adding ZT Systems was the next major step in AMD's long-term AI strategy. Advanced Micro Devices (AMD) took another big step in expanding its reach into artificial intelligence (AI) with the purchase of data center infrastructure provider ZT Systems. AMD said the cash-and-stock deal was valued at $4.9 billion, which includes a contingent payment of $400 million if certain milestones are reached after the close. AMD Chief Executive Officer (CEO) Dr. Lisa Su called the acquisition "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." Su explained that adding ZT Systems "will significantly strengthen our data center AI systems and customer enablement capabilities." AMD noted that in the past year, the company has invested more than $1 billion "to expand the AMD AI ecosystem and strengthen the company's AI software capabilities." That was in addition to spending more on internal research and development. The transaction is expected to close in the first half of 2025. Advanced Micro Devices shares, which had been essentially flat for the year, rose 2.2% to $151.84 soon after the opening bell Monday.

AMD signs $4.9bn deal to challenge Nvidia's AI infrastructure lead

AMD has agreed to acquire artificial intelligence infrastructure group ZT Systems in a $4.9bn cash and stock transaction, extending a run of AI investments by the chip company as it seeks to challenge market leader Nvidia. The California-based group said the acquisition would help accelerate the adoption of its Instinct line of AI data centre chips, which compete with Nvidia's popular graphics processing units. ZT Systems, a private company founded three decades ago, builds custom computing infrastructure for the biggest AI "hyperscalers". While the company does not disclose its customers, the AI hyperscalers include the likes of Microsoft, Meta and Amazon. It marks AMD's biggest acquisition since it bought Xilinx for $35bn in 2022. "It brings a thousand world-class design engineers into our team, it allows us to develop silicon and systems in parallel, and most importantly get the newest AI infrastructure up and running in data centres as fast as possible," AMD's chief executive Lisa Su told the Financial Times. "It really helps us deploy our technology much faster because this is what our customers are telling us [they need]," Su added. The transaction is expected to close in the first half of 2025, subject to regulatory approval, after which New Jersey-based ZT Systems will be folded into AMD's data centre business group. The $4.9bn valuation includes up to $400mn contingent on "certain post-closing milestones". Citi and Latham & Watkins are advising AMD, while ZT Systems has retained Goldman Sachs and Paul, Weiss. The move comes as AMD seeks to break Nvidia's stranglehold on the AI data centre chip market, which earlier this year saw Nvidia temporarily become the world's most valuable company as big tech companies pour billions of dollars into its chips to train and deploy powerful new AI models. Part of Nvidia's success stems from its "systems" approach to the AI chip market, offering end-to-end computing infrastructure that includes pre-packaged server racks, networking equipment and software tools to make it easier for developers to build AI applications on its chips. AMD's ZT Systems acquisition shows the chipmaker building out its own "systems" offering. The company rolled out its MI300 line of AI chips last year, and says it will launch its next-generation MI350 chip next year to compete with Nvidia's new Blackwell line of GPUs. In May, Microsoft was one of the first AI hyperscalers to adopt the MI300, building it into its Azure cloud platform to run AI models such as OpenAI's GPT-4. AMD's quarterly revenue for the chips surpassed $1bn for the first time in the three months to June 30. But while AMD has feted the MI300 as its fastest-ever product ramp, its data centre revenue still represented a fraction of the $22.6bn that Nvidia's data centre business raked in for the quarter to the end of April. In March, ZT Systems announced a partnership with Nvidia to build custom AI infrastructure using its Blackwell chips. "I think we certainly believe ZT as part of AMD will significantly accelerate the adoption of AMD AI solutions," Su said, but "we have customer commitments and we are certainly going to honour those". Su added that she expected regulators' review of the deal to focus on the US and Europe. In addition to increasing its research and development spending, AMD says it has invested more than $1bn over the past year to expand its AI hardware and software ecosystem. In July the company announced it was acquiring Finnish AI start-up Silo AI for $665mn, the largest acquisition of a privately held AI start-up in Europe in a decade.

AMD buys AI equipment maker for nearly $5 billion, escalating battle with Nvidia

Advanced Micro Devices agreed to pay nearly $5 billion to buy ZT Systems, a designer of data-center equipment for cloud computing and artificial intelligence, bolstering the chip maker's attack on Nvidia's dominance in AI computation. The deal, among AMD's largest, is part of a push to offer a broader menu of chips, software and system designs to big data-center customers such as Microsoft and Facebook owner Meta Platforms, promising better performance through tight linkages between those products. Secaucus, N.J.-based ZT Systems, which isn't publicly traded, was founded in 1994. It designs and makes servers, server racks and other infrastructure that house and connect chips in the giant data centers that power artificial-intelligence systems such as ChatGPT. ZT has more than $10 billion of annual sales, AMD Chief Executive Lisa Su said in an interview -- nearly half the $22.7 billion in revenue her company reported last year. However, AMD plans to sell ZT's manufacturing business after the acquisition is complete, keeping its system-design business. Su said ZT's main value for her company is in offering customers more hands-on assistance in setting up huge data centers where clusters of chips train up AI systems. "What it allows me to say to them is let me help you build your next training cluster, and tell me what's important to you," Su said. "I now have a very large design team that can help you do that." The deal could bolster AMD's competitive position against Nvidia, which also has added aggressively to its data-center offerings in recent years. Nvidia, for example, bought networking company Mellanox in 2020 for nearly $7 billion, bringing in supercomputing-grade data transfer capabilities that have helped it maintain its edge during the AI boom. It also increasingly has focused on designs for servers and data centers that its chips go into. AMD has made other moves in recent years to build up its data-center chops, including its acquisition of chip maker Xilinx in 2022 in an all-stock deal valued at nearly $50 billion at closing. Also in 2022, AMD bought Pensando Systems, a data-center chip and networking startup, for $1.9 billion. While Nvidia is by far the chip industry's prime beneficiary of the AI boom, AMD has been making inroads. Su last month raised her forecast for the company's AI chip sales to $4.5 billion this year after reporting quarterly results ahead of analysts' expectations. She had forecast $3.5 billion of sales in January. AMD valued the cash-and-stock deal for ZT at $4.9 billion, including a contingent payment of up to $400 million based on certain milestones after it closes. AMD said the deal is expected to close in the first half of next year, subject to regulatory approvals, and that ZT Chief Executive Frank Zhang will stay on after the acquisition. Zhang said in a statement that joining AMD will help ZT "play an even larger role designing the AI infrastructure that is defining the future of computing." The ZT deal is one of AMD's biggest, after the Xilinx acquisition and its $5.4 billion acquisition of ATI Technologies in 2006. AMD announced a much smaller AI-related deal last month, the approximately $665 million purchase of Silo AI, a Finnish company that helps customers integrate artificial intelligence into their products and operations.

AMD is going after Nvidia with a $5 billion acquisition

Semiconductor maker Advanced Micro Devices (AMD) will acquire cloud computing solutions firm ZT Systems for $4.9 billion, in a move that will help it compete against artificial intelligence chip rivals like Nvidia. Santa Clara, California-based AMD said Monday that the acquisition will complement its existing silicon and software capabilities and speed up the the large-scale deployment of AI infrastructure. "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," AMD chief executive Lisa Su said. AMD has funneled more than $1 billion into expanding its AI ecosystem and strengthening its AI software capabilities over the last 12 months, in addition to its research and development investments, the company said. Su told Reuters that having AI systems in place is now AMD's top priority. New Jersey-based ZT is a leading provider of AI infrastructure to hyperscale computing companies, which will be critical for AMD to be able to produce powerful AI chips at scale. "We are excited to join AMD and together play an even larger role designing the AI infrastructure that is defining the future of computing," ZT CEO Frank Zhang said. Following the completion of the acquisition, Zhang will lead the manufacturing business and ZT President Doug Huang will lead the design and customer enablement teams. The deal is expected to close in the first half of 2025, and could begin to generate profits by the end of next year. AMD stock rose 2% in pre-market trading Monday following the announcement. This is the latest step in AMD's ambitions to compete with more established AI chipmakers. In April, AMD announced new processors for AI-enabled laptops and desktops in an effort to catch up with rivals Nvidia and Intel, which already designed AI-capable chips for PCs.

Why Nvidia's main rival AMD is buying ZT Systems

Why it matters: The acquisition, announced Monday morning, shows just how far ahead rival Nvidia is in AI tech infrastructure than everybody else. Zoom in: After the deal closes, AMD will sell ZT Systems' U.S.-based data center infrastructure manufacturing and hold onto its system-design business. Context: Artificial intelligence requires complex computing, and that's why businesses are looking to buy more than just chips, says Rasgon. State of play: The fastest way, currently, to roll out an at-scale AI solution is to simply buy one from Nvidia, tech analyst Ben Thompson noted in Stratechery this morning. What they're saying: "The next major arc for AMD is AI," CEO Lisa Su said on an analyst call this morning. The big picture: M&A's been a key part of AMD's strategy to narrow Nvidia's lead. What we're watching: Nvidia has started selling more software to AI developers and has even set up its own server rental business to defend against any slowing demand for its products, The Information has reported.

AMD Forks Out $3.7 Billion In Cash To Buy Server Company For AI As Part Of $4.9 Billion Deal

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. In one of its biggest AI deals to date, AMD has announced that it is spending a whopping $4.9 billion to buy server manufacturer ZT Systems. ZT's products target a variety of industries, from 5G telecommunications to computing platforms, storage, and GPU servers, and the firm will be a part of AMD's bread and butter Data Center business division. As per the SEC filing, 75% or $3.675 billion of the deal will be financed by cash while the rest will be through stocks, with AMD expecting the deal to be completed by the first half of 2025. ZT Systems is a server designer and manufacturer, and by the looks of it, AMD is hoping to expand its design capabilities through the deal and expand its end to end AI offerings. Unlike NVIDIA, AMD is able to sell x86 CPUs for data centers and other use cases, enabling it to provide a diversified product roadmap for AI or other workloads. Following the deal, AMD will lay off 1,500 of ZT's roughly 2,500 employees. AMD expects the deal to close by the first half of next year, and for the financial benefits to start appearing on its income statement by 2025 end on a non adjusted basis. Previous acquisitions, such as AMD's acquisition of Xilinx were reflected on the income statement for multiple quarters as the firm paid off the costs of the deal. After the deal closes, ZT's CEO, Frank Zhang, will lead the manufacturing business, while its president, Doug Huang, will lead the design business. The company will be part of AMD's Data Center business division, and as per AMD, it will find a"strategic partner to acquire ZT Systems' industry-leading U.S.-based data center infrastructure manufacturing business," a move that should help protect AMD's margins. As per the complete agreement between AMD and ZT Systems and other disclosures, AMD will pay ZT $3.375 billion in closing cash consideration along with $300 million in cash through contingent consideration. This means that 75% of the deal will be financed with cash, implying that AMD might have to take out additional loans to finance the deal. The deal's closing will depend on regulatory approval, and if approved, it will allow AMD to expand its presence in the AI chip market. The firm estimates that the data center accelerator market for artificial intelligence workloads will sit at $400 billion in 2027, and ZT's experience in designing these systems should help provide AMD a leg up in the industry when it comes to selling its products. AMD's shares were up by a modest 2.3% in pre market trading today, and the firm plans to hold a call later during the day to share additional details for the deal. After having gained 52% year to date until March, the stock has been down 29% since then as the market takes a breather from its AI frenzy, and investors continue to eye earnings reports by keeping the revenue generated by AI software in mind.