AMD To Buy Server Company ZT Systems For $4.90 Billion

The acquisition comes as AMD expands its reach into artificial intelligence (A.I.) microchips and processors.

In a statement, AMD said that it plans to pay for ZT Systems through a combination of cash and stock. ZT Systems Chief Executive Officer (CEO) Frank Zhang will join AMD’s data centre unit.

ZT Systems currently has 2,500 employees, including 1,000 engineers. The company generates annual revenues of about $10 billion U.S.

AMD said the purchase of ZT Systems will allow it to more quickly rollout its latest A.I. chips, enabling it to better compete against rivals such as Nvidia (NVDA) and Microsoft (MSFT).

A.I. applications require companies to combine thousands of microchips in clusters located in servers to achieve the necessary computing power.

This has made microchip servers increasingly important in the global A.I. arms race that is underway.

AMD said that it expects the acquisition of ZT Systems to close in the first half of 2025. ZT Systems is likely to contribute to AMD’s financial performance within 18 months.

The stock of AMD has gained 37% over the past 12 months and currently trades at $148.56 U.S. per share.