AMD has announced plans to acquire ZT Systems, a prominent provider of AI infrastructure solutions for the world’s leading hyperscale computing companies. This acquisition is a significant move in AMD’s ongoing AI strategy, aiming to deliver cutting-edge AI training and inferencing solutions by innovating across silicon, software, and systems.
ZT Systems brings extensive expertise in designing and optimizing cloud computing solutions, which will bolster AMD’s ability to accelerate the deployment of AI infrastructure for cloud and enterprise customers on a larger scale.
With more than 15 years of experience, ZT Systems has established itself as a leading provider of data center AI compute and storage infrastructure, particularly for global cloud companies. Their capabilities in design, integration, manufacturing, and deployment have played a significant role in their success. The company, headquartered in Secaucus, New Jersey, will become part of the AMD Data Center Solutions Business Group following the close of the transaction.
Post-acquisition, ZT Systems CEO Frank Zhang will oversee the manufacturing business, while President Doug Huang will lead the design and customer enablement teams, both reporting to AMD Executive Vice President and General Manager Forrest Norrod. AMD also plans to seek a strategic partner to acquire ZT Systems’ U.S.-based data center infrastructure manufacturing business.
The transaction, valued at approximately $4.9 billion in cash and stock, includes a contingent payment of up to $400 million based on post-closing milestones. AMD anticipates that the acquisition will be accretive on a non-GAAP basis by the end of 2025. The deal has been unanimously approved by AMD’s Board of Directors and is expected to close in the first half of 2025, pending regulatory approvals and customary closing conditions.
This acquisition is part of a broader effort by AMD to strengthen its AI capabilities, following a series of investments totaling over $1 billion in the past year to expand its AI ecosystem and enhance its AI software.
Citi is serving as the exclusive financial advisor to AMD, with Latham & Watkins LLP as legal advisor. Goldman Sachs & Co. LLC is advising ZT Systems, with Paul, Weiss, LLP providing legal counsel.
Recently, AMD reported second-quarter 2024 revenue of $5.8 billion, with a gross margin of 49% and an operating income of $269 million. The company’s strong performance was driven by growth in its Data Center and Client segments, according to AMD EVP, CFO, and Treasurer Jean Hu.
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