AMD, the chipmaker closely following Nvidia, has made a significant acquisition to strengthen its role as a strategic partner for companies involved in the development of large AI enterprises. Today, AMD announced its acquisition of ZT Systems, a leading provider of compute design and infrastructure for AI, cloud, and general purpose computing, for a substantial sum of $4.9 billion. The agreement consists of a combination of cash and stock, with the potential for an additional payment of up to $400 million if specific performance metrics are achieved.
ZT systems agreement with AMD
We are considering the integration of ZT Systems’ computing infrastructure design business into our operations. AMD has announced its intention to sell ZT Systems’ data centre infrastructure manufacturing business to a strategic partner.
ZT Systems, headquartered in New Jersey, has remained privately held since its establishment in 1994. According to PitchBook, the company has only disclosed one external funding round, where it successfully secured $850 million in debt in 2023. It collaborates closely with major chipmakers like Nvidia and Intel in various domains, including server solutions for storage, GPU/accelerators, high-performance computing, 5G, and edge computing. 
According to AMD, this agreement will significantly enhance their knowledge and capabilities in AI system design, encompassing both hardware and software. This newfound expertise is expected to boost AMD’s chip sales and increase the adoption of systems powered by their chips among customers. AMD has already made a significant investment of approximately $1 billion in developing its broader ecosystem.
There is a clear demand for a more advanced approach. With the increasing complexity of AI systems, big tech companies will have a major focus on enhancing the efficiency of their systems, particularly in compute-heavy areas like AI model training and inferencing.
“The acquisition of ZT Systems represents a significant milestone in our ongoing AI strategy. We are committed to providing cutting-edge leadership training and inferencing solutions that can be quickly implemented on a large scale for both cloud and enterprise customers,” stated Dr. Lisa Su, AMD’s chair and CEO. ZT brings exceptional systems design and rack-scale solutions expertise to enhance our data centre AI systems and customer enablement capabilities. This acquisition further enhances our commitment to advancing our AI hardware and software roadmaps. By leveraging our powerful Instinct AI accelerator, EPYC CPU, and networking products, along with ZT Systems’ extensive knowledge in data centre systems, AMD is poised to provide comprehensive data centre AI infrastructure on a large scale. This will be made possible through our strong partnerships with OEM and ODM partners.
ZT Systems is known for its expertise in providing specialised support in complex and costly aspects of AI computing architecture design. While the company does not publicly reveal its client list, it has gained recognition in recent years for its proficiency in this field.
Frank Zhang, AMD’s CEO, will be in charge of its manufacturing division. ZT Systems is set to join AMD’s Data Centre Solutions Business Group.
“We are thrilled to be partnering with AMD and collectively contributing to the development of the AI infrastructure that is shaping the future of computing,” stated Zhang, CEO of ZT Systems. Over the course of nearly three decades, our company has transformed into a prominent supplier of essential computing and storage infrastructure for some of the biggest players in the cloud industry. AMD shares our vision for the crucial role our technology and our people play in designing and constructing the computing infrastructure that powers the largest data centres in the world.
ZT President Doug Huang has been appointed to lead the design and customer enablement teams, with both teams reporting to AMD executive vice president and general manager, Forrest Norrod.
