Advanced Micro Devices (AMD) announced on Monday its decision to acquire ZT Systems, an artificial intelligence infrastructure solutions company, for approximately $4.9 billion. This strategic move signifies AMD’s commitment to bolster its AI data center growth strategy while positioning itself as a leader in the rapidly evolving field of artificial intelligence. The acquisition will encompass a contingent payment of up to $400 million, contingent upon the achievement of certain predetermined milestones post-completion.
This cash-and-stock transaction is pending regulatory approval and is anticipated to close in the first half of 2025. Notably, AMD estimates that this acquisition will be accretive on an adjusted basis by the end of next year, indicating a projected positive financial impact. ZT Systems specializes in the design and deployment of AI compute and storage infrastructure specifically tailored for global cloud companies.
Upon the successful closure of this transaction, ZT Systems is set to become an integral part of AMD’s data center solutions business group, further enhancing its technological capabilities and market offerings. Leadership at ZT Systems will remain stable, with CEO Frank Zhang stepping in to oversee the manufacturing sector of the company, while President Doug Huang will manage the design and customer enablement teams, according to official statements.
Additionally, AMD has expressed intentions to seek a strategic partner to take over ZT Systems’ data center infrastructure manufacturing operations based in the United States, further emphasizing its focus on optimization and growth. Lisa Su, AMD's Chief Executive, articulated the significance of this acquisition: "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." Su further remarked that the transaction is expected to "significantly" enhance AMD’s data center AI systems and its customer enablement capabilities. In the last year, AMD has proactively invested over $1 billion to strengthen and expand its AI ecosystem and software capabilities, reflecting its aggressive strategy within the AI sector.
In a related development, just last week, AMD finalized its acquisition of the private artificial intelligence lab Silo AI for approximately $665 million. Moreover, it also acquired Mipsology and Nod.ai in the previous year as part of its broader AI growth strategy, clearly indicating AMD's robust commitment to leading in AI innovation. The market reaction to the announcement has been positive, with AMD's stock price climbing to $152.41, reflecting a change of $3.85 or a percentage increase of 2.59% as investors react favorably to this news..