AMD will purchase infrastructure player ZT Systems for $4.9 billion to expand its AI ecosystem play

AMD, the chipmaker behind Nvidia in the artificial intelligence race, today announced a major acquisition to strengthen its position as an "ecosystem" partner for companies building large artificial intelligence operations: it is buying ZT Systems, which provides artificial intelligence computer design and infrastructure. The deal is a mix of cash and stock and includes a potential payment of up to $400 million if certain performance metrics are met. The plan is to incorporate ZT Systems’ computing infrastructure design business. AMD said it will look to sell ZT Systems’ data center infrastructure manufacturing business to “a strategic partner.”

Based in New Jersey, ZT Systems has been privately-held since it was founded in 1994, and has disclosed only one external funding round  it raised $850 million in debt in 2023, according to PitchBook. It works closely with major chipmakers such as Nvidia and Intel in areas such as storage server solutions, GPUs/accelerators, high performance computing, 5G and edge computing. AMD said the deal would give it deeper expertise in designing artificial intelligence systems not only in chips, but also in software and systems, which could help AMD sell more chips (and systems powered by its chips) to customers. AMD announced that it has invested about $1 billion to build a broader ecosystem.

This improved approach is necessary. As AI systems become more complex, improving the efficiency of the systems in the most computationally intensive aspects, such as AI model training and inference, will be a top priority for the large technology companies that build and operate them. Dr. Lisa Su, AMD chairman and executive director, said: "Obtaining our ZT system is the next main step in our long -term AI strategy, that is, providing management training and conclusive solutions. Customers are quickly deployed," said Dr. Lisa Su, AMD chairman and CEO . 

In a statement. "ZT has added world -class system design and shelf  scale solutions to professional knowledge. This professional knowledge will greatly improve our data center AI systems and customer support functions. This acquisition also builds on our investment to accelerate our AI hardware and software roadmap. The combination of our high-performance Instinct AI accelerator, EPYC CPU and networking portfolio with ZT Systems' industry-leading data center expertise will enable AMD to deliver end-to-end data at scale through our OEM and ODM ecosystem hub AI infrastructure partner.

ZT Systems does not name its clients, but the company appears to have raised its profile in recent years by providing expert support for some of the more complex and expensive aspects of designing AI computer architectures. Its CEO, Frank Zhang, will lead AMD's manufacturing operations. ZT Systems will become part of AMD's Data Center Solutions business group. "We are excited to join AMD to play a greater role in designing the artificial intelligence infrastructure that will define the future of computing," ZT Systems CEO Zhang said in a statement "Over the past 30 years, we continue to grow our business and become the world's largest A leading provider of critical computing and storage infrastructure for cloud enterprises. 

AMD shares our vision that our technology and people are critical to designing and building the computing infrastructure that powers the world's largest data centers. ZT President Doug Huang will lead the design and customer support teams, both reporting to AMD Executive Vice President and General Manager Forrest Norrod. The transaction is expected to be completed in the first half of 2025.