ALBAWABA - Gaining data center capabilities that will strengthen its attempts to compete with Nvidia, Advanced Micro Devices Inc. (AMD) has reached an agreement to acquire ZT Systems, an enterprise that develops servers, in a deal that is valued at $4.9 billion and encompasses both cash and stocks.
In a statement released on Monday, it was announced that ZT Systems, headquartered in Secaucus, New Jersey, would be incorporated into AMD's Data Center Solutions Business Group.
Besides maintaining the design and customer service teams, AMD will investigate the possibility of selling the manufacturing division to avoid going up against clients like Dell Technologies Inc. and HP Enterprise Co., with a contingent payment of $400 million included in the acquisition deal that is dependent upon the achievement of specified milestones.
AMD is the second-largest producer of graphics processors, which have become an essential component in the process of building artificial intelligence software, investing more than $1 billion over the course of the last year and acquiring Silo AI for $665 million in July in order to broaden its presence in the industry, according to Yahoo.
These actions are considered to be pursued as part of an attempt to better compete with technology giant Nvidia, which has been seeing an appetite for its processors used in artificial intelligence applications that has become nearly insatiable during the last several years.
Shares of AMD rose as high as 4.2% in New York on Monday as a result of the acquisition deal, which was met with widespread approval from investors and expected to close by the first half of the coming year.
“Our acquisition of ZT Systems is the next major step in our long-term AI strategy to deliver leadership training and inferencing solutions that can be rapidly deployed at scale across cloud and enterprise customers,” said AMD Chair and CEO Dr. Lisa Su.
“Combining our high-performance Instinct AI accelerator, EPYC CPU, and networking product portfolios with ZT Systems’ industry-leading data center systems expertise will enable AMD to deliver end-to-end data center AI infrastructure at scale with our ecosystem of OEM and ODM partners,” Dr. Lisa Su. added.
