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Semiconductor maker Advanced Micro Devices AMD+1.15% will acquire cloud computing solutions firm ZT Systems for $4.9 billion, in a move that will help it compete against artificial intelligence chip rivals like Nvidia.
Santa Clara, California-based AMD said Monday that the acquisition will complement its existing silicon and software capabilities and speed up the the large-scale deployment of AI infrastructure.
“Our acquisition of ZT Systems is the next major step in our long-term AI strategy to deliver leadership training and inferencing solutions that can be rapidly deployed at scale across cloud and enterprise customers,” AMD chief executive Lisa Su said.
AMD has funneled more than $1 billion into expanding its AI ecosystem and strengthening its AI software capabilities over the last 12 months, in addition to its research and development investments, the company said.
Su told Reuters that having AI systems in place is now AMD’s top priority. New Jersey-based ZT is a leading provider of AI infrastructure to hyperscale computing companies, which will be critical for AMD to be able to produce powerful AI chips at scale.
“We are excited to join AMD and together play an even larger role designing the AI infrastructure that is defining the future of computing,” ZT CEO Frank Zhang said.
Following the completion of the acquisition, Zhang will lead the manufacturing business and ZT President Doug Huang will lead the design and customer enablement teams.
The deal is expected to close in the first half of 2025, and could begin to generate profits by the end of next year.
AMD stock rose 2% in pre-market trading Monday following the announcement.
This is the latest step in AMD’s ambitions to compete with more established AI chipmakers. In April, AMD announced new processors for AI-enabled laptops and desktops in an effort to catch up with rivals Nvidia NVDA+2.72% and Intel INTC-1.58%, which already designed AI-capable chips for PCs.
Both Nvidia NVDA+2.72% and AMD are customers of semiconductor leader Taiwan Semiconductor Manufacturing Company (TSMC), which produces an estimated 90% of the world’s advanced chips.