AMD to boost AI capabilities with $4.9bn acquisition of ZT Systems

Advanced Micro Devices, Inc. (AMD) is poised to strengthen its position in the artificial intelligence (AI) sector through the acquisition of ZT Systems, a prominent provider of infrastructure solutions for hyperscale computing. This strategic move, valued at $4.9 billion—including a potential $400 million contingent payment—represents a major leap forward in AMD’s AI strategy.

Strategic Implications for AMD

The acquisition of ZT Systems is a significant development in AMD’s efforts to become a leader in AI training and inferencing solutions. This transaction will enhance AMD’s capabilities in delivering high-performance AI infrastructure by integrating ZT Systems’ expertise in designing and optimizing cloud computing solutions. The acquisition is expected to close in the first half of 2025, pending regulatory approvals and other standard closing conditions.

Dr. Lisa Su, Chair and CEO of AMD, highlighted the strategic importance of this acquisition: “Our acquisition of ZT Systems is the next major step in our long-term AI strategy to deliver leadership training and inferencing solutions that can be rapidly deployed at scale across cloud and enterprise customers.” Su emphasized that ZT Systems’ extensive experience in systems design and rack-scale solutions will significantly bolster AMD’s data center AI systems and overall customer enablement capabilities.

ZT Systems’ Role in the AI Ecosystem

Headquartered in Secaucus, New Jersey, ZT Systems has built a strong reputation over its 15 years of operation. The company specializes in the design, integration, manufacturing, and deployment of data center AI compute and storage infrastructure. ZT Systems has been a key player in providing AI training and inference solutions to the world’s largest cloud providers, including major tech giants such as Amazon Web Services and Microsoft Azure.

ZT Systems’ acquisition by AMD will allow the integration of its proven data center solutions with AMD’s high-performance Instinct AI accelerators and EPYC CPUs. This merger is expected to enhance AMD’s ability to deliver comprehensive, end-to-end AI infrastructure solutions at scale, further solidifying its position in the competitive AI landscape.

Frank Zhang, CEO of ZT Systems, expressed excitement about the merger, stating, “We are excited to join AMD and play a larger role in designing the AI infrastructure defining the future of computing.” Zhang, along with ZT Systems President Doug Huang, will lead AMD’s Data Center Solutions Business Group post-acquisition, focusing on design, customer enablement, and manufacturing.

Transaction Details and Strategic Moves

The deal has received unanimous approval from AMD’s Board of Directors. Financial details include the acquisition value of $4.9 billion, with up to $400 million contingent on post-closing milestones. The transaction is expected to be accretive on a non-GAAP basis by the end of 2025.

Advisors and Legal Counsel

Citi is serving as the exclusive financial advisor to AMD, while Latham & Watkins LLP is providing legal counsel. For ZT Systems, Goldman Sachs & Co. LLC is the exclusive financial advisor, with Paul, Weiss, LLP acting as legal advisor.

Founded over 50 years ago, AMD is a global leader in high-performance computing, graphics, and visualization technologies. The company’s products are integral to numerous Fortune 500 companies and leading scientific research institutions, contributing to advancements in technology and innovation.

ZT Systems, headquartered in Secaucus, NJ, has a rich history of nearly 30 years in hyperscale server solutions. The company’s global manufacturing footprint supports its mission to empower the digital world with advanced technology infrastructure for cloud computing and AI.