AMD, the chipmaker that is ahead of Nvidia in the AI race, today announced a major acquisition to bolster its position as an “ecosystem” partner for companies building big AI businesses: ZT Systems AcquisitionIntel, which provides computing architectures and infrastructure for artificial intelligence, cloud computing and general-purpose computing, announced a $4.9 billion deal. The deal consists of a combination of cash and stock and includes a conditional payment of up to $400 million if certain performance benchmarks are met.
The plan is to merge ZT Systems’ computing infrastructure design business. AMD said it will seek to sell ZT Systems’ data center infrastructure manufacturing business to a “strategic partner.”
Headquartered in New Jersey, ZT Systems has been privately held since its founding in 1994 and has only disclosed one external funding round — it raised $850 million in debt in 2023, according to PlaybookIt works closely with major chip manufacturers such as Nvidia and Intel In areas such as server solutions for storage, GPUs/accelerators, high-performance computing, 5G networks, and edge computing.
AMD said the deal will give it deeper expertise in designing AI systems that include not just silicon, but software and systems as well — which could help AMD sell more of its chips (and the systems that run on its chips) to customers. AMD said it has already invested about $1 billion in building out its broader ecosystem.
This enhanced approach is needed: As AI systems become more complex, a key priority for the big tech companies that build and operate them will be to make their systems more efficient in the more computing-intensive aspects of AI model training and inference.
“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 rapidly deployed at scale across cloud and enterprise customers,” AMD Chairman and CEO, Dr. Lisa Su“ZT adds world-class expertise in system design and scale solutions that will significantly enhance our data center AI and customer enablement capabilities. This acquisition builds on the investments we have made to accelerate our AI hardware and software roadmaps. Combining the 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.”
ZT Systems does not disclose the names of its clients, but it appears to have increased its profile in recent years to provide specialized support in some of the most complex and expensive aspects of AI computing architecture design.
CEO Frank Zhang will lead AMD’s manufacturing business. ZT Systems will become part of AMD’s Data Center Solutions business group.
“We are excited to join AMD and play a greater role together in designing the AI infrastructure that defines the future of computing,” said Zhang, CEO of ZT Systems, in a statement. “For nearly 30 years, we have grown our business to become a leading provider of critical computing and storage infrastructure for the world’s largest cloud computing companies. AMD shares our vision for the important role our technology and people play in designing and building the computing infrastructure that powers the world’s largest data centers.”
ZT President Doug Huang will lead the design and customer enablement teams, both reporting to AMD EVP and GM, Forest Norwood.
The deal is expected to close in the first half of 2025.