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Reporter of China Business Network: Yang Hui Editor of China Business Network: Yang Xia

The competition for data centers among international giants is becoming increasingly fierce.

On August 20, a reporter from the Daily Economic NewsAMDAMD has agreed to acquire ZT Systems for $4.9 billion in cash and stock, including up to $400 million in contingent payments based on certain milestones upon closing. AMD expects the transaction to be accretive on a non-GAAP basis by the end of 2025.

Public information shows that ZT Systems providesAIAccording to AMD, the acquisition of ZT Systems will complement AMD'schipThe combined power of AMD’s AI computing power and software capabilities will accelerate the deployment of AMD AI rack-scale systems for cloud and enterprise customers, and will also help cloud and enterprise customers accelerate the large-scale deployment of AMD-powered AI infrastructure.

AMD Chairman and CEO Lisa Su said the acquisition of ZT Systems is the next major step in the company's long-term AI strategy, aiming to provide leading training and reasoning solutions that can be rapidly deployed at scale from the cloud to enterprise customers. "ZT brings world-class system design and rack-level solution expertise, which will greatly enhance our data center AI systems and customer support capabilities."

In addition, the reporter of "Daily Economic News" also learned that after the completion of the above transaction, ZT Systems will join AMD's Data Center Solutions Division. ZT CEO Frank Zhang will lead the manufacturing business, and ZT President Doug Huang will lead the design and customer support team. Both will report to AMD Executive Vice President and General Manager Forrest Norrod. AMD will also seek a strategic partner to acquire ZT Systems' leading data center infrastructure manufacturing business in the United States.

According to the financial report data, in the second quarter of this year, AMD was involvedCPU(CPU),GPUThe data center division, which includes businesses such as graphics processing units, had revenue of $2.8 billion, a year-on-year increase of 115%.NvidiaThe latest financial report has not yet been released. In the first fiscal quarter of fiscal year 2025, Nvidia's data center revenue was US$22.6 billion, a year-on-year increase of 427%.

In the view of multiple analysts, part of the reason why AMD lags behind Nvidia in the field of AI accelerators is that it did not build everything by itself, but chose to rely on ecosystem partnerships to integrate all of this together. Rack-scale and system-scale integration are two areas where AMD lags behind Nvidia. If executed well, the acquisition of ZT will help AMD take a larger share of the data center AI market expected to reach $400 billion in 2027.

(Cover image source: Photo taken by reporter Zheng Yuhang from China Business Network)

Daily Economic News