AMD is acquiring server maker ZT Systems in a cash-and-stock deal worth $4.9 billion to enhance its artificial intelligence capabilities.
After the acquisition, AMD plans to sell ZT Systems’ server manufacturing business.
Driving the news: ZT Systems, based in Secaucus, New Jersey, specializes in designing and deploying data center and storage infrastructure systems for cloud companies.
The big picture: The deal includes a contingent payment of up to $400 million based on post-closing milestones.
- AMD has invested over $1 billion in the past year to expand its AI ecosystem and enhance its AI software capabilities.
- The acquisition aims to strengthen AMD’s position in the market and compete with Nvidia in the artificial intelligence sector.
What we’re watching: The transaction is expected to be completed in the first half of the following year after being approved by AMD’s board.
- AMD’s shares rose more than 3% in anticipation of the deal.
