AMD is buying server maker ZT Systems in a cash-and-stock deal worth $4.9 billion as the chipmaker strengthens its artificial intelligence capacity in its efforts to compete with Nvidia.
AMD plans to sell ZT Systems’ server manufacturing business after the deal closes, with mergers and acquisitions in tech and elsewhere getting a closer look by the Biden Administration.
ZT Systems, based in Secaucus, New Jersey, is a privately held company that has designed and rolled out data center and storage infrastructure systems to cloud companies for more than a decade.
The transaction includes a contingent payment of up to $400 million based on post-closing milestones.
AMD is looking to bulk up its AI capabilities. Over the past year, the company has invested more than $1 billion to expand its AI ecosystem and strengthen its AI software capabilities.
The moves are part of an effort to better compete with tech giant Nvidia, which has experienced nearly insatiable demand for its chips to power artificial intelligence applications.
Once AMD’s deal with ZT Systems closes, it will join the AMD Data Center Solutions Business Group. AMD said Monday that it will look for a buyer for its U.S.-based data center infrastructure manufacturing business.
The transaction, which was approved by AMD’s board, is expected to close in the first half of next year.
Shares of AMD, based in Santa Clara, Calif., rose more than 3% before the market opened.
In a move that has sent shockwaves through the technology industry, AMD has announced its acquisition of server manufacturer ZT Systems for a staggering $4.9 billion. This acquisition is seen as a strategic move by AMD to enhance its artificial intelligence (AI) capabilities in the highly competitive chipmaking industry.
ZT Systems is a leading provider of server solutions for data centers, cloud computing, and AI applications. By acquiring ZT Systems, AMD will gain access to cutting-edge technology and expertise in server manufacturing, which will allow the company to strengthen its position in the rapidly growing AI market.
One of the key reasons behind this acquisition is AMD’s desire to expand its presence in the data center market, which is expected to see exponential growth in the coming years as more companies adopt AI technologies. By acquiring ZT Systems, AMD will be able to offer a comprehensive range of server solutions that are specifically designed to meet the demands of AI workloads.
Furthermore, this acquisition will also enable AMD to accelerate its research and development efforts in AI chipmaking. With access to ZT Systems’ advanced manufacturing facilities and expertise, AMD will be able to develop next-generation AI chips that are more powerful and energy-efficient than ever before.
Overall, this acquisition is a significant milestone for AMD as it seeks to establish itself as a major player in the AI chipmaking industry. By combining its own expertise in chip design with ZT Systems’ capabilities in server manufacturing, AMD is well-positioned to drive innovation and shape the future of AI technology. Only time will tell how this acquisition will impact the chipmaking industry, but one thing is certain – AMD is making bold moves to stay ahead of the competition.
