In a vertical integration move, AMD today announced an agreement to acquire data center and hyperscale systems supplier ZT Systems for nearly $5 billion.
The acquisition underscores the high-stakes competition AMD is waging against Nvidia’s dominance in the exploding market for GPUs that power AI workloads along with Nvidia’s growing AI systems business. In late July, investment bank Morgan Stanley said Nvidia is expected to ship between 60,000 and 70,000 Blackwell GB200 AI servers worth more than $200 billion in revenue. Blackwell is Nvidia’s flagship accelerator announced last March.
The AMD-ZT Systems deal, which AMD said is expected to close in the first half of 2025, is a cash and stock transaction valued at $4.9 billion. Privately owned and founded in 1994, ZT Systems’ annual revenue is estimated at $10 billion.
“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. “ZT adds world-class systems design and rack-scale solutions expertise that will significantly strengthen our data center AI systems and customer enablement capabilities.
“This acquisition also builds on the investments we have made to accelerate our AI hardware and software roadmaps,” Su said. “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.”
Patrick Moorhead
Industry analyst Patrick Moorhead, CEO at Moor Insights & Strategy, called the acquisition an “accelerant” in AMD’s effort to carve out a larger position in the AI industry.
“The AI infrastructure game is not just a chip game; it has become a more vertically oriented system and software game,” Moor said in a LinkedIn post. “’Chip’ vendors are expected to deliver the full rack and software stacks to achieve year-on-year improvements to performance, efficiency, quality and time-to-market. And the ZT acquisition is targeted at accelerating AMD’s ‘above the chip’ and ‘below (the) software’ capabilities for AI servers.”
AMD said ZT Systems will join the AMD Data Center Solutions Business Group. Zhang will lead the manufacturing business and ZT President Doug Huang will lead the design and customer enablement teams, both reporting to AMD Executive Vice President and General Manager Forrest Norrod. AMD said it will seek a strategic partner to acquire ZT Systems’ U.S.-based data center infrastructure manufacturing business.
The acquisition of ZT Systems marks the latest investments by AMD intended to strengthen the company’s AI capabilities. In the last 12 months AMD has invested more than $1 billion to expand the AMD AI ecosystem and strengthen the company’s AI software capabilities, according to the company.
“We are excited to join AMD and together play an even larger role designing the AI infrastructure that is defining the future of computing,” said Frank Zhang, CEO of Secaucus, NJ-based ZT Systems. “For almost 30 years we have evolved our business to become a leading provider of critical computing and storage infrastructure for the world’s largest cloud companies. AMD shares our vision for the important role our technology and our people play designing and building the computing infrastructure powering the largest data centers in the world.”
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