DBT Bureau
Bengaluru, 20 August 2024
As competition for AI-powered chips heats up, chip maker- AMD said it would acquire server maker ZT Systems for $4.9 billion as the company seeks to strengthen its portfolio of artificial intelligence chips and hardware. This move is largely seen as AMD’s attempt to garner a larger market share in the AI-powered chip space, which is currently being led by Nvidia.
According to an official announcement, New Jersey-based ZT Systems will become part of AMD’s Data Center Solutions Business Group. While AMD will retain the business’s design and customer teams, it may look to sell the manufacturing division.
This acquisition is likely to boost AMD’s capacity to serve large clients as ZT has extensive experience making server computers for owners of large data centers. Notably, companies like Google, Microsoft, Meta and others are building large data centres to computing complexity increases with AI-led applications.
“AI is the most transformational technology of the last 50 years and our No. 1 strategic priority,” AMD Chief Executive Officer Lisa Su said in a call with investors on Monday as reported by Bloomberg. She also said that the ZT takeover would allow the company’s largest customers to more rapidly deploy AMD’s AI infrastructure, reports said.
ZT had top line of around $10 billion in the last 12 months, almost all from manufacturing. However, AMD plans to sell the manufacturing operations and retain the design part.
In July, the company agreed to buy Silo AI for $665 million to add a maker of artificial intelligence models in its portfolio.
