AMD to acquire server maker ZT Systems

AMD The corporate mentioned on Monday it plans to accumulate server maker ZT Methods for $4.9 billion because it seeks to develop and compete in its portfolio of synthetic intelligence chips and {hardware}. NVIDIA.

AMD plans to accumulate 75% of ZT Methods’ shares in money and the remaining shares in inventory. As of the second quarter, the corporate had $5.34 billion in money and short-term investments.

The computing necessities of synthetic intelligence dictate that know-how corporations string collectively hundreds of chips to attain the mandatory knowledge processing capabilities. Connecting numerous chips collectively implies that the composition of the whole server system turns into more and more necessary, which is why AMD acquired ZT Methods.

“Synthetic intelligence techniques are our high strategic precedence,” AMD CEO Lisa Su instructed Reuters in an interview.

Su mentioned that the addition of ZT Methods engineers will allow AMD to check and launch its newest AI graphics processing models (GPUs) sooner to satisfy the wants of cloud computing giants equivalent to Microsoft.

“The primary method (ZT Methods) brings added worth to the corporate is that we promote extra GPUs,” Su mentioned.

AMD plans to spin off its server manufacturing enterprise and promote it as soon as the deal closes because it has no plans to compete with different corporations super microcomputerSu mentioned.

AMD has not but held talks with potential consumers.

ZT Methods CEO Frank Zhang will be a part of AMD and report back to Forrest Norrod, head of AMD knowledge facilities.

Intently held ZT Methods has about 2,500 staff, of which AMD plans to retain about 1,000 engineers. Su mentioned ZT Methods at the moment has annual income of about $10 billion.

Executives anticipate the deal to shut within the first half of 2025 and anticipate it should take one other 12 to 18 months to promote the manufacturing enterprise.

Nvidia CEO Jensen Huang mentioned on the firm’s developer convention in March that the previous chip designer now creates and sells whole knowledge facilities, or the one parts wanted to construct them. Analysts anticipate the corporate’s knowledge middle enterprise, which incorporates chips and different synthetic intelligence {hardware}, to generate $105.9 billion in income this 12 months. Su mentioned final month that the corporate anticipated income from AI chips to be about $4.5 billion this 12 months. The corporate’s prospects embrace Microsoft and Meta Platforms.

AMD expects ZT Methods to contribute to the corporate’s adjusted monetary efficiency by the tip of 2025.