AMD to Acquire ZT Systems for $4.9B in Cash, Stock

AMD announced on Monday that it intends to acquire ZT Systems, a server manufacturer, for $4.9 billion to broaden its artificial intelligence processors and hardware portfolio and compete with Nvidia

Cash will comprise 75% of AMD’s acquisition of ZT Systems, with the remaining 25% to be paid in stock. As of the second quarter, the organization maintained $5.34 billion in cash and short-term investments.

Tech companies have been compelled to cluster thousands of chips to accomplish the requisite amount of data-crunching horsepower due to the computing requirements of AI. AMD is acquiring ZT Systems because the composition of entire server systems has become increasingly significant due to the stringing together of enormous numbers of chips.

AMD’s shares experienced a roughly 3% increase in premarket trading.

In an interview with Reuters, AMD CEO Lisa Su stated, “AI systems are our primary strategic objective.”
Su stated that including ZT Systems engineers will enable AMD to test and deploy its most recent AI graphics processing units (GPUs) more efficiently at the scale cloud computing titans like Microsoft require.

“The main way (ZT Systems) is additive to the company is we sell more GPUs,” Su indicated.