AMD is set to buy server maker ZT Systems for $4.9 billion, aiming to boost its AI chip and hardware offerings to compete with Nvidia, according to Reuters.
AMD will pay 75% of the deal in cash and the rest in stock. With $5.34 billion in cash and short-term investments as of the last quarter, AMD is well-positioned for this purchase.
AI’s growing demands mean tech firms need powerful server systems. AMD is acquiring ZT Systems to improve its ability to test and deploy AI graphics processors on a large scale.
ZT Systems has about 2,500 employees, and AMD plans to keep around 1,000 of them, which will cost an additional $150 million annually.
The deal is expected to close in the first half of 2025, with the sale of ZT Systems’ manufacturing business following.
AMD’s CEO, Lisa Su, emphasized that AI is a top priority for the company. The acquisition is seen as a way to strengthen AMD’s position in the data center market and drive future revenue growth.
Creative Strategies’ CEO Ben Bajarin and Summit Insights’ Kinngai Chan both noted that this deal should positively impact AMD’s long-term revenue strategy by enhancing its cloud computing services and GPU sales.
Reuters provided these details.