AMD — Advanced Micro Devices, Inc., has made a significant move in the artificial intelligence sector by announcing its acquisition of ZT Systems for approximately $4.9 billion. This acquisition underscores AMD’s strategy to build out a comprehensive ecosystem and offer more to its customers in the AI race. AMD’s strategic purchase aims to provide industry-leading systems expertise to accelerate the deployment of optimized rack-scale solutions.
The company is addressing a substantial $400 billion data center AI accelerator market opportunity projected for 2027. ZT Systems specializes in rack-level solutions — fully integrated racks that include servers, liquid cooling systems, networking equipment, power distribution, and customized software. These roll-in solutions offer a plug-and-play setup for data center customers.
AMD’s recent activities highlight its expanding capabilities in the AI arena. They have acquired Silo, the largest AI lab in Europe, for around $600 million, enhancing their AI expertise. The acquisition price of $4.9 billion will be a mix of cash and stock.
AMD bolsters AI with ZT Systems
Although AMD’s market cap of approximately $250 billion makes this deal seem relatively small, it is a significant financial commitment, considering AMD’s balance sheet shows around $5 billion in cash and equivalents. Inventec has agreed to sell its shares in ZT Systems to AMD and will become a shareholder of AMD as part of the transaction.
The announcement on August 27 follows AMD’s acquisition of ZT Systems and its plan to sell the latter’s manufacturing business. Inventec, which holds a 10% stake in ZT Systems, announced that it will join the sale and become a shareholder in AMD. The total transaction is valued at approximately NT$13.16 billion.
Inventec stated that this move aims to strengthen its financial position and potentially refocus its business efforts. AMD emphasized that adding ZT’s 1,000 engineers will significantly bolster its silicon and software capabilities, particularly in systems-level design—a critical area as AI clusters and rack-scale solutions continue to expand in size and complexity. Stifel analyst Ruben Roy shed light on AMD’s strategy, stating: “Given the increasing complexity of AI computing, we believe that the primary strategy underpinning the deal is AMD’s desire to have system/cluster designs in hand as silicon is brought up.
The transaction is anticipated to conclude in the first half of next year, and AMD anticipates modest dilution in the first year following its close.
However, by the end of 2025, the company expects the transaction to become accretive on a run-rate basis.
