AMD Acquires ZT Systems: Strengthens AI Server Systems with ZT Systems

AMD announced on Monday that it will pay $4.9 billion to acquire ZT Systems, a manufacturer of servers, in an effort to take on Nvidia and diversify its line of artificial intelligence chips and systems. Tech companies have been forced to cluster thousands of chips in order to reach the processing capacity required for AI and meet the required processing speed. AMD is purchasing ZT Systems because the integration of large numbers of chips has made the composition of entire server systems more crucial.

• AMD intends to use cash to cover 75% of the ZT Systems acquisition and shares for the remaining amount.
• As of the second quarter, the company’s cash and short-term investments were $5.34 billion.

In an interview with Reuters, AMD CEO Lisa Su stated that AI systems are the company’s top strategic focus. According to Su, AMD will be able to test and release its newest AI graphics processing units (GPUs) at a faster pace due to the hiring of ZT Systems experts, meeting the demands of massive cloud computing companies like Microsoft.

The main way ZT Systems is additive to the company is we sell more GPUs,

Su

AMD to Keep 1,000 Workers and Sell Server Manufacturing Division Following the Acquisition

After the purchase is complete, AMD intends to sell its server manufacturing division because it has no intention of going up against businesses like Super Micro Computer. But AMD hasn’t had any discussions with possible purchasers yet.

• Frank Zhang, the CEO of ZT Systems, is joining AMD and will answer Forrest Norrod, the company’s head of data centers.
• About 2,500 people work for the closely held ZT Systems, and AMD said it intends to keep about 1,000 of them. This will translate into yearly operating expenses of nearly $150 million.
• At the moment, ZT Systems brings in about $10 billion a year, the majority of which comes from its manufacturing division.

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