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AMD has agreed to acquire server builder ZT Systems in a cash and stock deal worth $4.9 billion.
The transaction comprises 75% in cash with the remainder to be paid in stock, with a contingency payment of $400 million if certain conditions are met.
A press release from AMD outlined the details of the “definitive agreement” to acquire ZT, which will see the company expand its AI infrastructure to challenge Nvidia, after a similar strategic move by Huawei.
Secaucus, New Jersey-based ZT Systems will be absorbed into AMD’s Data Center Solutions Business Group, with the design and customer teams to be retained but the data center infrastructure manufacturing business will be sold off.
AMD Chair and CEO Dr. Lisa Su. said ZT’s assets and expertise in systems design “will significantly strengthen our data center AI systems and customer enablement capabilities”
Very excited to announce we have signed an agreement to acquire leading hyperscale solutions provider @ZTSystems. Next major step in our AI strategy combining our silicon, software and ZT’s world class systems expertise to enable rapid deployment of @AMD AI solutions at scale for… pic.twitter.com/jgla2cWDdV
— Lisa Su (@LisaSu) August 19, 2024
“AI Systems Are Our Number One Strategic Priority”
The vast computing power required for AI has forced tech companies to construct powerful chip clusters to produce the required data output. With such a concentrated volume of semiconductors, the wider server system takes on greater importance, leading to AMD deciding to acquire ZT, as unanimously approved by its board of directors.
In an interview with Reuters, Su added “AI systems are our number one strategic priority, following over $1 billion of investment into the company’s AI ecosystem in the last 12 months.
ZT has a workforce of around 2,500 people with AMD set to proceed with 1,000 engineers from that figure.
The deal is expected to be completed in the first half of next year, with the divestment of ZT’s manufacturing business within a further 12 to 18 months.
