AMD to Acquire ZT Systems for $4.9 Billion to Boost AI Capabilities

AMD has announced plans to acquire server maker ZT Systems for $4.9 billion in a deal comprising both cash and stock. The acquisition, which includes a contingent payment of up to $400 million based on post-closing milestones, is aimed at enhancing AMD's artificial intelligence (AI) capabilities and competing more effectively with Nvidia. AMD intends to pay for 75% of the acquisition with cash, while the remaining 25% will be covered by AMD stock.

ZT Systems will be integrated into AMD’s Data Center Solutions Business Group, focusing on AI infrastructure and customer enablement. The acquisition is expected to contribute to AMD's adjusted financial performance by 2025. AMD also plans to divest ZT Systems' server manufacturing business post-acquisition and will seek a strategic partner for this purpose. This move aligns with AMD's broader strategy to expand its AI ecosystem and capabilities, having invested over $1 billion in the past year to bolster its AI hardware and software offerings.