AMD announced plans to acquire server maker ZT Systems for $4.9 billion to enhance its AI chip and hardware capabilities and compete with Nvidia, Reuters reports.
The acquisition will be financed with 75% cash and 25% stock. AMD, which had $5.34 billion in cash and short-term investments as of Q2, aims to strengthen its position in AI systems by integrating ZT Systems’ engineering expertise for testing and deploying AI GPUs at large scales. The deal, expected to close in the first half of 2025, will involve retaining about 1,000 of ZT Systems’ 2,500 employees. Following the deal, AMD plans to sell its server manufacturing business, as it does not intend to compete with other server companies.
ZT Systems currently generates about $10 billion in annual revenue and CEO Frank Zhang will join AMD. AMD anticipates the acquisition will positively impact its financial performance by the end of 2025. AMD’s shares rose nearly 3% in premarket trading following the announcement.