AMD is set to acquire server company ZT Systems for $4.9 billion in a significant cash-and-stock transaction. The chip manufacturer aims to leverage this acquisition to enhance its artificial intelligence capabilities, positioning itself as a more formidable competitor to Nvidia. The agreement includes a potential $400 million contingent payment based on specific milestones post-closing.
ZT Systems, a privately held company out of Secaucus, New Jersey, has been crafting data center infrastructure for cloud firms for over a decade. However, AMD plans to divest ZT Systems' server manufacturing segment following the transaction's completion. This move comes amid increased scrutiny of tech mergers by the Biden administration.
The transaction, approved by AMD's board, is expected to conclude in the first half of next year. Once finalized, ZT Systems will become part of AMD's Data Center Solutions Business Group. Reflecting investor optimism, AMD shares climbed over 3% in pre-market trading. (This story was generated by Newser's AI chatbot. Source: the AP)
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