AMD, a prominent chipmaker vying with Nvidia in the competitive AI landscape, has announced a significant acquisition aimed at enhancing its position as a leading “ecosystem” partner for businesses prioritizing AI development. The company is set to acquire ZT Systems, which specializes in compute design and infrastructure for AI, cloud, and general-purpose computing, for $4.9 billion. This deal comprises both cash and stock, with a contingent payment of up to $400 million contingent upon achieving specific performance targets.
The primary focus of this acquisition is to integrate ZT Systems’ infrastructure design capabilities into AMD's operations. AMD plans to divest ZT Systems’ data center infrastructure manufacturing segment to a strategic partner in the near future.
Founded in 1994 and based in New Jersey, ZT Systems has remained privately owned and has disclosed only a single round of external funding—$850 million in debt raised in 2023, according to PitchBook. The company collaborates closely with major chip manufacturers like Nvidia and Intel in areas such as server solutions, GPU/accelerators, high-performance computing, 5G, and edge computing.
AMD believes that acquiring ZT Systems will enhance its expertise in AI systems design, encompassing both hardware and software integration. This advancement is essential for AMD to increase sales of its chips and systems among burgeoning AI customers. The company has already invested approximately $1 billion into expanding its broader ecosystem.
As AI systems become increasingly intricate, boosting system efficiency for compute-intensive tasks like AI model training and inferencing is a top priority for major tech enterprises.
“Our acquisition of ZT Systems marks a significant milestone in our long-term strategy to offer leading training and inferencing solutions that can be swiftly deployed at scale for cloud and enterprise clients,” stated AMD chair and CEO, Dr. Lisa Su. “ZT brings exceptional systems design and rack-scale solutions expertise that will profoundly enhance our capabilities in data center AI systems and customer enablement. This acquisition will also advance our investments aimed at fast-tracking our AI hardware and software development. By combining our high-performance Instinct AI accelerator, EPYC CPU, and networking product lines with ZT Systems’ renowned expertise in data center systems, we will provide comprehensive AI infrastructure at scale with our OEM and ODM partners.”
While ZT Systems does not disclose its client list, its reputation appears to have grown recently for delivering specialized support in navigating the most challenging and costly aspects of AI computing architecture design.
Frank Zhang, the CEO of ZT Systems, will oversee AMD’s manufacturing division, and ZT Systems will be integrated into AMD’s Data Center Solutions Business Group.
“We are thrilled to join forces with AMD to expand our role in shaping the AI infrastructure that is redefining the computing landscape,” remarked Frank Zhang. “For nearly three decades, we have developed our business into a leading provider of essential computing and storage infrastructure for the world’s largest cloud enterprises. AMD shares our vision of the pivotal role our technology and team play in designing and building the infrastructure that powers the largest data centers globally.”
Doug Huang, president of ZT, will lead the design and customer enablement teams, both of whom will report to Forrest Norrod, AMD's executive vice president and general manager.
The acquisition is anticipated to finalize in the first half of 2025.
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