tech

Just over two years after acquiring Xilinx, "Mother Su" has once again embarked on a shopping spree.

At 18:00 Beijing time on August 19, American chip giant AMD announced the acquisition of ZT Systems, the world's largest hyperscale computing company and a leading provider of AI infrastructure systems, in a cash and stock transaction valued at up to $4.9 billion (approximately 35.014 billion yuan), thereby significantly expanding AMD's data center AI systems business.

AMD stated that the $4.9 billion includes up to $400 million in contingent payments based on certain milestones after the completion of the transaction. The company emphasized that ZT Systems has extensive experience in designing and optimizing cloud computing solutions, and this acquisition will also help cloud and enterprise customers significantly accelerate the large-scale deployment of AI infrastructure supported by AMD, prompting AMD to offer leading AI training and inference solutions based on innovations across chips, software, and systems. AMD expects that by the end of 2025, the transaction will be accretive on a non-GAAP revenue basis.

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The transaction has been unanimously approved by AMD's board of directors and is currently expected to be completed in the first half of 2025, subject to approval from certain regulatory authorities and satisfaction of other customary closing conditions. Upon completion of the acquisition, ZT Systems will become part of AMD's data center solutions business group. AMD will retain the company's design and customer teams and consider selling the manufacturing division.

Dr. Lisa Su, AMD's Chairman and CEO, said: "The acquisition of ZT Systems is the next important step in our long-term AI strategy, aimed at providing leadership training and inference solutions that can be rapidly and massively deployed in the cloud and among enterprise customers. ZT brings world-class expertise in system design and rack-level solutions, which will greatly enhance our data center AI systems and customer support capabilities. This acquisition also builds on our investments to accelerate the AI hardware and software roadmap, combining our high-performance Instinct AI accelerators, EPYC CPUs, and networking product portfolio with ZT Systems' industry-leading data center system expertise, enabling AMD to provide end-to-end data center AI infrastructure on a large scale through our OEM and ODM partner ecosystem."

Following the announcement, AMD's US stocks surged, with pre-market gains exceeding 2%, after previously falling nearly 1%.

It is known that ZT Systems, headquartered in Secaucus, New Jersey, USA, has over 15 years of experience in designing and deploying data center AI computing and storage infrastructure for the world's largest cloud companies. ZT Systems' capabilities in design, integration, manufacturing, and deployment make it one of the leading providers of AI training and inference infrastructure.

Notably, NVIDIA and OpenAI have been clients of ZT Systems. In June of this year, ZT Systems announced the launch of the ACX200 solution featuring NVIDIA's GB200 Grace Blackwell superchip for next-generation accelerated computing.

Therefore, given the relationship between NVIDIA and AMD, this implies that after AMD's acquisition of ZT Systems is completed, cooperation with NVIDIA may cease.

Upon completion of the transaction, ZT Systems will join AMD's data center solutions business group. ZT's CEO, Frank Zhang, will lead the manufacturing operations, and ZT Systems' President, Doug Huang, will lead the design and customer support teams; both will report to Forrest Norrod, AMD's Executive Vice President and General Manager. AMD will seek strategic partners to acquire ZT Systems' industry-leading US data center infrastructure manufacturing business.ZT Systems CEO Frank Zhang stated, "We are thrilled to join AMD and play an even greater role in shaping the AI infrastructure that defines the future of computing. For nearly 30 years, we have been growing our business to become a leading supplier of key computing and storage infrastructure for the world's largest cloud companies. AMD shares our vision that our technology and employees play a significant role in designing and building the computing infrastructure that supports the world's largest data centers."

In fact, in February 2022, AMD announced the completion of the acquisition of Xilinx, a major FPGA company, in an all-stock transaction valued at $49.8 billion (approximately 316.5 billion yuan). Following the acquisition, AMD CEO Dr. Lisa Su will continue to serve as the company's CEO, and Xilinx President and CEO Victor Peng will join AMD as the president of the newly formed Adaptive and Embedded Computing Group (AECG). However, it is expected that by August 30, Victor Peng will retire from AMD.

Now, less than three years after acquiring Xilinx, AMD is once again making a move to acquire a leading company in the industry chain, doubling down on the AI computing power race.

AMD emphasizes that over the past 12 months, in addition to increasing organic R&D activities, AMD has also invested over $1 billion to expand the AMD AI ecosystem and enhance the company's AI software capabilities.