AMD has agreed to invest $4.9 billion in ZT Systems infrastructure to enhance its AI ecosystem

AMD, the chipmaker hot on the heels of Nvidia in the AI ​​race, is making a major acquisition aimed at strengthening its position as an "ecosystem" partner for companies building big AI companies. The chipmaker announced today that it will acquire ZT Systems, a design and computing infrastructure provider for AI, cloud and general computing, for $4.9 billion. The transaction is all cash and stock and includes a contingent payment of up to $400 million based on the achievement of certain performance indicators. The plan envisages the integration of ZT Systems' IT infrastructure design activities. AMD said it would seek to sell ZT Systems' data center infrastructure manufacturing business to "a strategic partner." Based in New Jersey, ZT Systems has been private since its founding in 1994 and has only reported one round of external financing: $850 million in debt that will mature in 2023, according to PitchBook. It works closely with major chip makers such as Nvidia and Intel on topics such as server solutions for storage, GPUs/accelerators, high-performance computing, 5G and edge computing. According to AMD, the deal will deepen its expertise base in designing AI systems, not just silicon, but also software and systems, which will help sell more of its chips and systems that use those chips to customers. AMD said that for this reason, it has already invested about $ 1 billion in building its broader ecosystem. This improved approach is needed. One of the most critical priorities for large technology companies building and operating AI systems will be to increase the efficiency of the systems for the most computationally intensive aspects, such as model training and AI inference.

AMD has agreed to invest $4.9 billion in ZT Systems infrastructure to enhance its AI ecosystem.

 "Our acquisition of ZT Systems is the next big step in our long-term AI strategy to provide leadership training and inference solutions that can be rapidly deployed at scale for cloud and enterprise customers," said the president and CEO of AMD Dr. Lisa Su in one. declaration “ZT brings world-class systems design and rack-scale solutions expertise that will significantly enhance our data center AI systems and customer enablement capabilities. This purchase is also based on the investments we've made to accelerate our AI hardware and software roadmaps. With our high-performance network portfolios and Instinct AI accelerators, EPYC and network processors, combined with ZT Systems' industry-leading expertise in data center systems, AMD will be best positioned to deliver an infrastructure smart end-to-end data center automation at scale with our ecosystem of OEM and ODM partners. It doesn't name clients, but the company has built its profile in recent years by providing specialized help in some of the sharper and more expensive aspects of AI computer architecture design. Its CEO Frank Zhang will lead AMD's manufacturing operations. ZT Systems will become part of the AMD Data Center Solutions business group. "We are extremely excited to join AMD and play an even bigger role in building the AI ​​infrastructure that will define the future of computing," said Zhang, CEO of ZT Systems, who commented in a press release . "For almost 30 years, we have evolved our business to become a leading provider of the most critical computing and storage infrastructure for the world's largest cloud computing companies. "AMD shares our vision for the important role that our technology and people play in designing and building the IT infrastructure that powers the world's largest data centers. » ZT president Doug Huang will lead the design and customer enablement teams and both will report to AMD executive vice president and general manager Forrest Norrod. The operation should be completed during the first half of 2025.