AMD Acquires ZT Systems For $4.9B To Challenge Nvidia In AI Market

Advanced Micro Devices (AMD) has announced its plan to acquire ZT Systems in a $4.9 billion cash-and-stock deal, aiming to bolster its artificial intelligence (AI) capabilities. According to reports, this acquisition is designed to enhance AMD's position in the competitive AI market and challenge Nvidia's dominance.

ZT Systems, located in Secaucus, New Jersey, specializes in data center and storage infrastructure systems. As part of the acquisition, AMD intends to integrate ZT Systems into its Data Center Solutions Business Group but will also look to divest its U.S.-based data center infrastructure manufacturing business, a press release by the company said.

The deal includes a contingent payment of up to $400 million based on specific milestones achieved after the deal closes. AMD's investment in AI technology over the past year exceeds $1 billion, reflecting its commitment to expanding its AI ecosystem and competing with Nvidia, which has experienced high demand for its AI chips. Quartz reported that ZT Systems' AI infrastructure expertise will be vital for AMD's goals in the AI sector.

ZT Systems' CEO will continue to oversee the manufacturing business, while the company's President will manage design and customer enablement teams. The acquisition is expected to be finalized in the first half of 2025, with AMD's stock showing a 2% increase in pre-market trading following the announcement. This move highlights AMD's strategy to advance its AI capabilities and compete more effectively in the market.