AMD has officially announced its intention to acquire ZT Systems. ZT Systems is a successful American company, not listed on the stock exchange, with sales of US$10 billion. The company employs around 2,500 people. The company offers various equipment, server racks, storage platforms, edge solutions and 5G offerings. It works with cloud providers to build their infrastructures.
AMD’s objective is to finalize the acquisition in the first half of 2025, and hopes that ZT Systems’ sales will consolidate its business in the second half of 2025. The purchase price would be $4.9 billion. The transaction would be settled as follows: 75% in cash, with the remaining 25% paid in AMD shares. Of the company’s 2,500 current employees, AMD would retain only 1,000. A great deal of internal mobility is expected to take place, as this takeover also implies that AMD will divest its server manufacturing business, so as not to compete with companies such as Super Micro Computer.
AMD’s aim is to offer AI servers 100% equipped with all its products. It’s a way of circumventing NVidia’s hegemony. Nvidia CEO Jensen Huang said at the company’s developer conference in March that his company was now creating and selling entire data centers, or the individual components needed to build them.
The computing needs of AI have driven technology companies to group thousands of chips into clusters in order to obtain the necessary computing power. Assembling large numbers of chips means that composing entire server systems has become increasingly important, which explains AMD’s acquisition of ZT Systems.
A major advantage is that the first customer to buy these solutions would be Microsoft, which wants to equip itself massively with this new generation of servers.
