AMD plans to spin out and sell ZT’s manufacturing assets, focusing instead on the systems design capabilities.
AMD plans to acquire hyperscale server maker ZT Systems for $4.9 billion, on top of a $1bn investment the chip company previously made.
After the deal closes, the company plans to spin out and sell ZT’s manufacturing assets, focusing instead on the systems design capabilities. The acquisition is expected to close in the first half of 2025, subject to regulatory approvals.
ZT CEO and Founder Frank Zhang will lead the manufacturing business, while ZT President Doug Huang will head design and customer enablement, reporting to Forrest Norrod, the Head of AMD’s Data Center Solutions Business Group.
The company currently designs, integrates, manufactures, and deploys servers for companies like Amazon Web Services and Microsoft Azure, leading to a rumoured $10bn in annual revenue and hundreds of thousands of servers delivered annually.
“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 centres in the world.”
AMD CEO Dr Lisa Su added, “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.
ZT adds world-class systems design and rack-scale solutions expertise that will significantly strengthen our data centre AI systems and customer enablement capabilities.”
The chip company has seen sales of its Epyc CPU line eat into rival Intel’s market share, but has failed to capture the same success in the GPU AI space.
Nvidia continues to dominate the market, with its valuation jumping into the multi-trillions. AMD hopes that its Instinct GPUs will begin to whittle away at that market, with a forecast of $4.5bn in sales this year. AMD predicts that the entire AI accelerator market, including Nvidia, will be worth $400bn by 2027.
“Combining our high-performance Instinct AI accelerator, Epyc CPU, and networking product portfolios with ZT Systems’ industry-leading data centre systems expertise will enable AMD to deliver end-to-end data centre AI infrastructure at scale with our ecosystem of OEM and ODM partners,” Su said.
The deal will be funded 75% by cash and 25% by stock.
