AMD to Acquire ZT Systems for $4.9 Billion

By Bobby Samwell • Monday, August 19 07:55 • Permanent Link

AMD (NASDAQ: AMD) has announced its definitive agreement to acquire ZT Systems in a cash and stock transaction valued at $4.9 billion, inclusive of a contingent payment of up to $400 million based on certain post-closing milestones. This strategic acquisition is expected to significantly expand AMD's data center AI systems capabilities.

The acquisition is expected to be accretive on a non-GAAP basis by the end of 2025. ZT Systems, headquartered in Secaucus, New Jersey, brings extensive AI systems expertise that complements AMD's silicon and software capabilities. ZT Systems has more than 15 years of experience designing and deploying data center AI compute and storage infrastructure at scale for the largest global cloud companies.

In the last 12 months, in addition to increasing organic R&D activities, AMD has invested more than $1 billion to expand the AMD AI ecosystem and strengthen the company’s AI software capabilities. The acquisition of ZT Systems marks the latest in a series of investments by AMD to significantly strengthen the company’s AI capabilities.

This acquisition will add world-class design and customer enablement teams to accelerate the deployment of AMD AI rack-scale systems with cloud and enterprise customers. Following the transaction close, ZT Systems will join the AMD data center solutions business group. ZT CEO Frank 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.

The transaction is currently expected to close in the first half of 2025, subject to certain regulatory approvals and other customary closing conditions.

AMD will hold a conference call for the financial community to discuss the transaction. The webcast will be available for 12 months after the conference call. Citi is acting as the exclusive financial advisor to AMD and Latham & Watkins LLP is serving as its legal advisor. Goldman Sachs & Co. LLC is acting as the exclusive financial advisor to ZT Systems and Paul, Weiss, LLP is serving as its legal advisor.

This strategic acquisition positions AMD to deliver end-to-end data center AI infrastructure at scale with their ecosystem of OEM and ODM partners. This move is a significant step in AMD's long-term AI strategy to deliver leadership training and inferencing solutions that can be rapidly deployed at scale across cloud and enterprise customers. Today the company's shares have moved 0.8% to a price of $148.56. Check out the company's full 8-K submission here.

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