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 +2.79% to $152.70 premarket Aug. 19