AMD Acquires ZT Systems in $4.9 Billion AI Play

AMD has completed its $4.9 billion acquisition of ZT Systems, giving the chipmaker an expanded presence in the lucrative AI market.

“With the rapid pace of innovation in AI, reducing the end-to-end design and deployment time of cluster-level data center AI systems will be a significant competitive advantage for our customers,” AMD executive vice president Forrest Norrod said. “Acquiring ZT Systems is a significant milestone in our AI strategy to deliver leadership training and inferencing solutions that are optimized for our customers’ unique environment, ready-to-deploy at scale, and based on our open ecosystem approach.”

AMD announced it would acquire ZT in August 2024, and CEO Dr. Lisa Su signaled at the time that the firm would shift gears to focus on the AI datacenter market, taking on market leader Nvidia. In subsequent quarters, AMD’s Data Center saw revenue growth of 122 percent and 94 percent, respectively, and 69 percent annually; in its most recent quarter, Data Center revenues set an all-time record, and that business now accounts for over half of all AMD revenues.

But AMD has a long fight ahead of it if it intends to unseat Nvidia, which earns dramatically more than AMD each quarter. In the most recent quarter, Nvidia’s Data Center delivered revenues of $35.6 billion, for example, compared to $3.9 billion for AMD.

AMD hopes the ZT Systems acquisition will accelerate its plan to design and deploy a “new class of end-to-end AI solutions based on the combination of AMD CPU, GPU and networking silicon, open-source AMD ROCm software and rack-scale systems capabilities” at scale. It will integrate ZT’s design team into its Data Center business, which will continue to be led by Mr. Norrod, and ZT founder and CEO Frank Zhang will join AMD as senior vice president of ZT Manufacturing, reporting to Norrod. Former ZT Systems president Doug Huang is also joining AMD, as senior vice president of Data Center Platform Engineering; he will also report to Norrod, and will “lead design and customer enablement teams.”