AMD to Boost AI Ecosystem with $4.9B Acquisition of Infrastructure Firm ZT Systems

AMD will pay $4.9 billion to acquire ZT Systems to strengthen its AI ecosystem and add AI infrastructure design expertise to its data center capabilities.

Nvidia and AMD are both chip manufacturers that are engaged in the AI race. Today, AMD announced a big acquisition that will make it a better “ecosystem” partner for companies building big AI businesses: it is buying ZT Systems for $4.9 billion.

ZT Systems provides compute design and infrastructure for AI, cloud computing, and general-purpose computing. The agreement encompasses both cash and stock, with a potential $400 million payout contingent on the achievement of specific performance targets.

ZT Systems plans to add its computer infrastructure design business to its portfolio. AMD stated its intention to sell ZT Systems’ data centre infrastructure business to a “strategic partner.”

ZT Systems has been a privately owned company based in New Jersey since its founding in 1994. According to PitchBook, the company has only disclosed one external funding round, in which it raised $850 million in debt in 2023.

That is why it collaborates closely with big chipmakers such as Nvidia and Intel on things like storage server solutions, GPU/accelerators, 5G, high-performance computing, and edge computing.

AMD said that the deal would give it more experts in designing AI systems that include not only silicon but also software and systems. This could help AMD sell more chips and systems that use its chips. AMD said it has already put around $1 billion into building its ecosystem. We need a better way of doing things.

One of the main goals of the big tech companies that build and run AI systems as they get more complex will be to make their systems faster for the parts that need a lot of computing power, like training AI models and drawing conclusions.

Dr. Lisa Su, chair and CEO of AMD, said in a statement, “Our acquisition of ZT Systems is the next big step in our long-term AI strategy to deliver leadership training and inference solutions that can be quickly deployed at scale across cloud and enterprise customers.”

“ZT adds world-class system design and rack-scale solutions expertise to our data center AI systems and customer enablement capabilities, making them much stronger.” This purchase adds to the money we’ve already spent to speed up the development of our AI hardware and software.

When we combine ZT Systems’ world-class data centre systems expertise with our high-performance Instinct AI accelerator, EPYC CPU, and networking product lines, AMD will be able to scale end-to-end data center AI infrastructure through our ecosystem of OEM and ODM partners.

ZT Systems’ Growing Role in AI Infrastructure Design

While ZT Systems doesn’t say who its clients are, the company seems to have become better known in recent years for helping with some of the trickiest and most expensive parts of designing AI architecture.

The CEO of ZT Systems, Zhang, said in a statement, “We are excited to join AMD and play an even bigger role in designing the AI infrastructure that is defining the future of computing.”

“We have grown our business over the past 30 years to become a top provider of important computing and storage infrastructure for the biggest cloud companies in the world.”

AMD and we both see how important it is for our technology and people to design and build the computer systems that power the world’s biggest data centres.

The CEO of ZT, Doug Huang, will be in charge of the design and customer enablement teams. He and Forrest Norrod, executive vice president and general manager of AMD, will be in charge of both teams. The deal should go through in the first half of 2025