AMD to Significantly Expand Data Center AI Systems Capabilities with Acquisition of Hyperscale Solutions Provider ZT Systems
https://ir.amd.com/news-events/press-releases/detail/1211/amd-to-significantly-expand-data-center-ai-systems
Posted by robmafia
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— Strategic acquisition to provide AMD with industry-leading systems expertise to accelerate deployment of optimized rack-scale solutions addressing $400 billion data center AI accelerator opportunity in 2027 —
ZT Systems, a leading provider of AI and general purpose compute infrastructure for the world’s largest hyperscale providers, brings extensive AI systems expertise that complements AMD silicon and software capabilities
Addition of world-class design and customer enablement teams to accelerate deployment of AMD AI rack scale systems with cloud and enterprise customers
AMD to seek strategic partner to acquire ZT Systems’ industry-leading manufacturing business
Transaction expected to be accretive on a non-GAAP basis by the end of 2025
SANTA CLARA, Calif., Aug. 19, 2024 (GLOBE NEWSWIRE) — AMD (NASDAQ: AMD) today announced the signing of a definitive agreement to acquire ZT Systems, a leading provider of AI infrastructure for the world’s largest hyperscale computing companies. The strategic transaction marks the next major step in AMD’s AI strategy to deliver leadership AI training and inferencing solutions based on innovating across silicon, software and systems. ZT Systems’ extensive experience designing and optimizing cloud computing solutions will also help cloud and enterprise customers significantly accelerate the deployment of AMD-powered AI infrastructure at scale.
AMD has agreed to acquire ZT Systems in a cash and stock transaction valued at $4.9 billion, inclusive of a contingent payment of up to $400 million based on certain post-closing milestones. AMD expects the transaction to be accretive on a non-GAAP basis by the end of 2025.
“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,” said AMD Chair and CEO Dr. Lisa Su. “ZT adds world-class systems design and rack-scale solutions expertise that will significantly strengthen our data center AI systems and customer enablement capabilities. This acquisition also builds on the investments we have made to accelerate our AI hardware and software roadmaps. Combining our high-performance Instinct AI accelerator, EPYC CPU, and networking product portfolios with ZT Systems’ industry-leading data center systems expertise will enable AMD to deliver end-to-end data center AI infrastructure at scale with our ecosystem of OEM and ODM partners.”
Headquartered in Secaucus, New Jersey, ZT Systems has more than 15 years of experience designing and deploying data center AI compute and storage infrastructure at scale for the largest global cloud companies. ZT Systems’ design, integration, manufacturing and deployment capabilities have made them one of the leading providers of AI training and inference infrastructure.
“We are excited to join AMD and together play an even larger role designing the AI infrastructure that is defining the future of computing,” said Frank Zhang, CEO of ZT Systems. “For almost 30 years we have evolved our business to become a leading provider of critical computing and storage infrastructure for the world’s largest cloud companies. AMD shares our vision for the important role our technology and our people play designing and building the computing infrastructure powering the largest data centers in the world.”
Following transaction close, ZT Systems will join the AMD Data Center Solutions Business Group. ZT CEO Frank Zhang will lead the manufacturing business and ZT President Doug Huang will lead the design and customer enablement teams, both reporting to AMD Executive Vice President and General Manager Forrest Norrod. AMD will seek a strategic partner to acquire ZT Systems’ industry-leading U.S.-based data center infrastructure manufacturing business.
The acquisition of ZT Systems marks the latest in a series of investments by AMD to significantly strengthen the company’s AI capabilities. In the last 12 months, in addition to increasing organic R&D activities, AMD has invested more than $1 billion to expand the AMD AI ecosystem and strengthen the company’s AI software capabilities.
Additional Transaction Details
The transaction has been unanimously approved by the AMD Board of Directors. The acquisition is currently expected to close in the first half of 2025, subject to certain regulatory approvals and other customary closing conditions.
Conference Call and Webcast Details
AMD will hold a conference call for the financial community at 8:30 am EDT today to discuss the transaction. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its website at ir.amd.com. The webcast will be available for 12 months after the conference call.
Advisors
Citi is acting as exclusive financial advisor to AMD and Latham & Watkins LLP is serving as its legal advisor. Goldman Sachs & Co. LLC is acting as exclusive financial advisor to ZT Systems and Paul, Weiss, LLP is serving as its legal advisor.
About AMD
For more than 50 years AMD has driven innovation in high-performance computing, graphics and visualization technologies. AMD employees are focused on building leadership high-performance and adaptive products that push the boundaries of what is possible. Billions of people, leading Fortune 500 businesses and cutting-edge scientific research institutions around the world rely on AMD technology daily to improve how they live, work and play. For more information about how AMD is enabling today and inspiring tomorrow, visit the AMD (NASDAQ: AMD) website, blog, LinkedIn and X pages.
About ZT Systems
ZT Systems is a leading supplier of hyperscale server solutions for cloud computing and artificial intelligence. With over 29 years of experience, ZT Systems is headquartered in Secaucus, NJ. Global manufacturing spanning the US, EMEA and APAC helps ZT Systems deliver on our mission of empowering our digital world with the most advanced technology infrastructure for cloud and AI. Learn more at ztsystems.com.
the price is actually a little bit substantial, unlike their silo/nod acquisitions of late. even pensando was only $3.5B (and all cash), iirc.
how many ai companies is Lisa buying lately? bitch need to chill out a bit
This acquisition signals weakness. They are buying a rack server company so they can put their MI300X inside to try to sell more units.
Why would a semi company buy a rack server company unless they can’t gain market share. So they are trying to gain marker share through snerygies.
Also, if a hyperscaler bought zt systems racks but wanted NVIDIA B100, they will need to put those GPUs in.
Strategically, they need to focus on a CUDA transpiler because that is the moat. Its not server rack.
So for me, this signals weakness because they are making a move into non core compentency in a somewhat desperate move to gain market share because core offering can’t do it.
Rip nvidia bulls
Please blast this past $200
Not giving them American Money Destroyer
Learned my lessons.
Hold for opening bell?
Personally im selling my 50 NVDA shares at an avg prce of $78 probably close to earnings at around $134 since I really don’t think NVDA will have much more upside. By the time AI becomes very very profitable, I think a handful of years still, there will be other competitors. NVDA upside is not much more. But Im holding AMD as its likely the only competitor that has a chance.
Figures…. I sold not too long ago
Used to work for ZT. It’s a good buy. Tons of talent there. And they are CM for a lot of the big hyperscalers.