Investments in artificial intelligence continue to surge, and AMD, one of the leading companies in the semiconductor sector, has taken a significant step by announcing the acquisition of ZT Systems. This company, relatively unknown to the general public, could become a key ally for AMD in its battle to position itself as a leader in the highly competitive AI market.
ZT Systems: A Strategic Player in the Cloud
ZT Systems, founded in 1994, began its journey by manufacturing PCs and small servers. Over time, the company specialized in providing infrastructure and computing designs for data centers and large cloud platforms. In recent years, ZT Systems has gained recognition for supplying solutions to AI "hyperscalers," or large tech companies that require massive infrastructure for their operations. This makes the acquisition particularly valuable for AMD, which seeks to compete more aggressively in the AI field.
This purchase becomes the third most significant acquisition in AMD's history. The company had previously made two notable acquisitions: in 2020, it acquired Xilinx for $35 billion, and in 2006, it took over ATI, known for its graphics cards, for $5.4 billion. The deal with ZT Systems is valued at $4.9 billion, with an additional $400 million contingent on certain performance targets.
AMD has clarified that it will integrate ZT Systems' infrastructure design business but will not retain the manufacturing division of that infrastructure. This part of the business will be sold to a "strategic partner." Supermicro, one of ZT Systems' direct competitors, could be a potential buyer, given its long-standing collaboration with giants like NVIDIA, Intel, and AMD itself.
Boosting AI and Expanding in the Cloud
The competition between AMD and NVIDIA in the AI field is fierce, and with this acquisition, AMD aims to expand its set of resources and capabilities. The integration of ZT Systems will not only strengthen the development of new semiconductors but also provide an advantage in areas such as software and specialized systems. Additionally, ZT Systems has high-profile clients like AWS and Azure, which could significantly enhance AMD's offering of complete AI solutions, including chips, software, and new cloud infrastructure.
AMD CEO Lisa Su highlighted the importance of this acquisition, describing it as a "crucial step" in the company's strategy to deliver leading AI solutions capable of rapidly deploying at scale in both cloud and enterprise environments. According to Su, ZT Systems' designs will integrate with AMD's graphics and CPUs to provide end-to-end data center AI infrastructure at scale.
