AMD (NASDAQ: AMD) has announced a strategic agreement to acquire ZT Systems, a leading provider of infrastructure for artificial intelligence (AI) aimed at the world’s largest providers of large-scale computing. The transaction, valued at $4.9 billion in cash and stock, includes a contingent payment of up to $400 million based on certain milestones following the closure. This acquisition is expected to be accretive to adjusted non-GAAP earnings by the end of 2025.
An important step in AMD’s AI strategy
The agreement represents a significant advancement in AMD’s long-term AI strategy, which aims to deliver leading AI training and inference solutions through innovation in silicon, software, and systems. According to AMD’s President and CEO, Dr. Lisa Su, “ZT brings top-tier expertise in rack-scale system design and solutions that will significantly strengthen our capabilities in AI systems for data centers and customer enablement.”
Headquartered in Secaucus, New Jersey, ZT Systems has over 15 years of experience in designing and deploying computing and storage infrastructure for large-scale data centers. Their expertise in design, integration, and manufacturing has positioned them as one of the leading providers of infrastructure for AI training and inference.
Integration and future outlook
Following the transaction’s closure, ZT Systems will be integrated into AMD’s Data Center Solutions Group. Frank Zhang, CEO of ZT Systems, will lead the manufacturing business, while Doug Huang, president of ZT, will oversee the design and customer enablement teams. Both will report to Forrest Norrod, Senior Vice President and General Manager of AMD.
AMD will also seek a strategic partner to acquire ZT Systems’ data center infrastructure manufacturing business, which is based in the U.S.
Impact on the AI ecosystem
The acquisition of ZT Systems is the latest in a series of investments by AMD to strengthen its AI capabilities. Over the past year, AMD has invested over $1 billion to expand its AI ecosystem and enhance its software capabilities in this area.
AMD’s goal with this acquisition is to combine its Instinct AI accelerator portfolios, EPYC CPUs, and networking products with ZT Systems’ expertise to deliver AI infrastructure for data centers at scale, in collaboration with its OEM and ODM partners.
Additional details of the transaction
The transaction has been unanimously approved by AMD’s Board of Directors and is expected to close in the first half of 2025, subject to certain regulatory approvals and other customary closing conditions. AMD will host a conference call for the financial community at 8:30 am EDT to discuss the transaction, which will be available in real-time on its Investor Relations webpage.
About AMD and ZT Systems
AMD has been an innovator in high-performance computing, graphics, and visualization technologies for over 50 years. Its technology is essential to millions of individuals and Fortune 500 companies worldwide. Meanwhile, ZT Systems is a leading provider of solutions for large-scale cloud computing and artificial intelligence servers, with a nearly 30-year track record in the industry.