AMD acquires ZT Systems for $4.9 billion to boost AI capabilities in data centers

Advanced Micro Devices (NASDAQ:AMD) acquires AI infrastructure provider ZT Systems in a cash and stock transaction valued at approximately $4.9 billion.

The transaction value includes a contingent payment of up to $400 million, the amount of which is contingent on the achievement of certain milestones following the closing of the transaction.

AMD has noted that it will be searching for a strategic partner to take over the American company ZT Systems, which produces data center infrastructure.

As noted by the company, with this acquisition, AMD will expand the capabilities of data centers and AI systems.

AMD said Secaucus, New Jersey-based ZT Systems’ expertise in designing and optimizing cloud computing solutions will help enterprise and cloud customers accelerate their deployment of AMD-based AI infrastructure at scale.

AMD said the transaction represents another important step in the company’s strategy to deliver AI training and executive-level reasoning solutions based on silicon, software and systems innovations.

“Combining our product portfolio of the high-performance Instinct AI accelerator, EPYC processor and networking with ZT Systems’ industry-leading expertise in data center systems will enable AMD to deliver a comprehensive AI infrastructure for data centers at scale in collaboration with our ecosystem of OEM and ODM partners,” said Lisa Su, president and CEO, AMD.

Following the close of the transaction, ZT Systems will join AMD’s Data Center Solutions Business Group. ZT CEO Frank Zhang will lead manufacturing operations, and ZT President Doug Huang will lead the design and customer support teams.

In addition to increasing organic R&D activities, AMD has invested more than $1 billion over the past year to expand AMD’s AI ecosystem and strengthen the company’s AI software capabilities, AMD said.

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 before the market open on August 19