AMD to buy server maker, designer ZT Systems in US$4.9 billion challenge to Nvidia
- AMD has its sights set on Nvidia, the runaway leader in the market for data centre gear needed to support AI computing
Advanced Micro Devices (AMD) agreed to buy server maker ZT Systems in a cash and stock transaction valued at US$4.9 billion, adding data centre technology that will bolster its efforts to challenge Nvidia.
ZT Systems, based in Secaucus, New Jersey, will become part of AMD’s Data Centre Solutions Business Group, according to a statement Monday. AMD will retain the business’s design and customer teams and look to sell the manufacturing division.
The purchase price includes a contingent payment of US$400 million based on certain milestones.
AMD investors applauded the deal, sending the shares up as much as 4.2 per cent in New York on Monday. The transaction consists of 75 per cent cash and 25 per cent AMD ordinary share.
Closely held ZT has extensive experience making server computers for owners of large data centres – the kind of customers that are pouring billions of dollars into new artificial intelligence (AI) capabilities.
“AI is the most transformational technology of the last 50 years and our No 1 strategic priority,” AMD chief executive officer Lisa Su said in a call with investors on Monday, adding that the ZT takeover will allow the company’s largest customers to more rapidly deploy AMD’s AI infrastructure.
ZT’s engineers “understand the challenges of designing and managing high-performance and high-density systems at a massive scale”, she said.
