(Reuters) – AMD said on Monday it plans to acquire server maker ZT Systems for $4.9 billion to expand its artificial intelligence portfolio.
AMD plans to pay 75% of the ZT Systems acquisition in cash and the remainder in stock.
“Artificial intelligence systems are our number one strategic priority,” AMD Chief Executive Lisa Su told Reuters.
According to Lisa Su, the integration of ZT Systems engineers will enable AMD to more quickly test and deploy its latest AI graphics processing units (GPUs) at the scale required by computing giants.
AMD plans to spin off its server business and sell it after the deal closes, as the U.S. maker has no plans to compete with companies such as Super Micro Computer, Su added.
The group has not yet started negotiations with potential buyers.
Frank Zhang, general manager of ZT Systems, will join AMD and report to AMD’s head of data centers, Forrest Norrod.
ZT Systems, a privately held company, employs about 2,500 people, and AMD plans to retain about 1,000 engineers. ZT Systems currently generates annual revenue of about $10 billion.
Management expects the transaction to close in the first half of 2025 and anticipates an additional 12 to 18 months for the sale of the manufacturing business.
AMD expects ZT Systems to contribute to the company’s adjusted financial performance through the end of 2025.
(Reporting by Max A. Cherney in San Francisco, Elena Smirnova, editing by Kate Entringer)
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