AMD acquires server manufacturer ZT Systems for $4.9 billion and will compete against NVIDIA's AI infrastructure

AMD has announced the acquisition of server manufacturer ZT Systems for $4.9 billion in order to better compete against high-flyer NVIDIA in the AI ​​industry.

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The company plans to pay 75% of the ZT Systems acquisition in cash, while the rest will be provided in AMD stock. As of the second quarter of 2024, AMD has $5.34 billion in cash and short-term investments, and ZT Systems is one of those investments.

ZT Systems is an artificial intelligence infrastructure group that will help AMD create better AI infrastructure and bring AMD's new Instinct MI300 series AI accelerators into data centers. Founded over 30 years ago, ZT Systems is a privately held company that builds custom computing infrastructure for some of the world's largest AI hyperscalers.

The company doesn't disclose its customers, but AI hyperscalers include companies like Microsoft, Meta, and Amazon… some of the largest companies in the world and some of the biggest players in the AI ​​industry.

Why is this important?NVIDIA is the dominant player in AI, and one of the reasons for that is that NVIDIA offers the entire ecosystem, not just the AI ​​chip. NVIDIA offers everything a multimillion-dollar AI server needs as a product: an AI server built by NVIDIA. The motherboard, the massive interconnect systems, the ultra-fast network… it's all NVIDIA.

AMD doesn't have this technology, but with the help of ZT Systems, it can expand on it, significantly increasing its competitiveness against NVIDIA in the race for AI supremacy. We can imagine a future where AMD offers an Instinct AI server, just as NVIDIA does with its GB200 AI servers that are on the way and its current GH200 AI servers on the market.

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AMD Chairman and CEO Dr. Lisa Su said: “Our acquisition of ZT Systems is the next major step in our long-term AI strategy to deliver leadership training and inference solutions that can be deployed quickly and at scale across cloud and enterprise customers. ZT brings world-class expertise in system design and rack-scale solutions that will significantly strengthen our data center AI systems and customer support capabilities. This acquisition also builds on the investments we have made to accelerate our AI hardware and software roadmaps. By combining our powerful Instinct AI accelerator, EPYC CPU, and networking product portfolios with ZT Systems' industry-leading data center systems expertise, AMD can deliver end-to-end data center AI infrastructure at scale with our ecosystem of OEM and ODM partners.“.