AI

AMD to buy ZT Systems for $4.9B to expand data center AI punch

AMD  signed a deal to buy ZT Systems for $4.9 billion to develop server racks for AI training and inferencing. The deal is expected to close by the end of 2025.

AMD CEO Lisa Su said the acquisition is the next step in AMD’s strategy to deliver leadership training and inference that can be deployed rapidly across cloud and enterprise customers. She said the acquisition builds on investments AMD has made  and combines its Instinct AI accelerator, EPYC CPU and networking product portfolios with ZT’s data center systems expertise.

This combination will “enable AMD to deliver end-to-end data center AI infrastructure at scale with our ecosystem of OEM and ODM partners,” she said in a statement.

The big question is whether AMD is acting fast enough, given Nvidia’s advantage in the space.  Su told Reuters “the main way ZT Systems is additive to the company is we sell more GPUs.”  Nvidia already has about 85% of the total GPU market with AMD in a distant second.

In March, Nvidia CEO Jensen Huang described how Nvidia had the ability to sell entire data centers to customers, using clusters of GPUs as the basis of that work. Nvidia is expected to generate $106 billion from data center sales in 2024, while AMD expects to collect $4.5 billion of AI chip revenue for the same period.