AMD's latest buy to boost AI strategy
AMD acquires ZT Systems to compete with Intel, Nvidia and others
AMD (Advanced Micro Devices Inc.) has agreed to acquire ZT Systems, a provider of AI infrastructure for hyperscale computing companies, for $4.9bn (£3.8bn).
The acquisition marks the next step in the vendor's strategy to deliver leadership AI training and inferencing solutions based on innovating across silicon, software and systems.
This strategy is also a long-term one, as in 2023, Mark Taylor, AMD's former North America channel chief, recognised this year as one of the most influential ones, was already shaping the company's programmes to prepare partners for new AI-related products in the PC, datacentre and cloud markets.
Under Taylor's leadership, the company acquired Mipsology and Nod.ai.
As AMD told CRN in July, despite Taylor's departure, its commitment to the channel ‘only strengthened' as the company bet its next phase of growth on the promise of AI to compete with Intel, Nvidia and others.
The chip designer later acquired Silo AI and now ZT Systems, bringing to $1bn the total invested in the last 12 months to extend the AMD AI ecosystem and strengthen the company's AI software capabilities.
The buyout is coming at a good time for the company, as the latter has reported $5.8bn in revenue for the second quarter of 2024, a nine percent increase compared to last year ($5.4bn).
"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," said AMD chair and CEO Dr. Lisa Su.
ZT Systems, the New Jersey-based business, has more than 15 years of experience designing and deploying datacentre AI compute and storage infrastructure at scale for the largest global cloud companies.
ZT Systems' experience designing and optimising cloud computing solutions will also help cloud and enterprise customers accelerate the deployment of AMD-powered AI infrastructure at scale.
"We are excited to join AMD and together play an even larger role designing the AI infrastructure that is defining the future of computing," said Frank Zhang, CEO of ZT Systems.
Transaction details
AMD has agreed to acquire ZT Systems in a cash and stock transaction valued at $4.9bn, inclusive of a payment of up to $400m based on certain post-closing milestones.
AMD expects the transaction to be accretive on a non-GAAP basis by the end of 2025.
Following transaction close, ZT Systems will join the AMD datacentre solutions business group.
Frank Zhang, CEO of ZT Systems, will lead the manufacturing business and Doug Huang, president of ZT Systems, will lead the design and customer enablement teams.