AMD to accumulate server builder ZT Techniques

Superior Micro Gadgets on Monday mentioned it plans to accumulate server maker ZT Techniques for $4.9 billion as the corporate seeks to broaden its portfolio of synthetic intelligence chips and {hardware} and battle Nvidia.

AMD plans to pay for 75% of the ZT Techniques acquisition with money and the rest in inventory. The corporate had $5.34 billion in money and short-term investments as of the second quarter.

The computing necessities for AI have dictated that tech firms string collectively 1000’s of chips in clusters to attain the required quantity of information crunching horsepower. Stringing collectively the huge numbers of chips has meant the make-up of entire server methods has grow to be more and more vital, which is why AMD is buying ZT Techniques.

“AI methods are our primary strategic precedence,” AMD CEO Lisa Su mentioned in an interview with Reuters.

The addition of ZT Techniques engineers will enable AMD to extra shortly check and roll out its newest AI graphics processing items (GPUs) on the scale cloud computing giants resembling Microsoft require, Su mentioned.

“The primary means (ZT Techniques) is additive to the corporate is we promote extra GPUs,” Su mentioned.

AMD plans to interrupt off its server manufacturing enterprise and promote it as soon as the deal closes, because it has no plans to compete with firms resembling Tremendous Micro Pc, Su mentioned.

AMD has not but held talks with potential patrons.

ZT Techniques Chief Government Frank Zhang will be a part of AMD and report back to AMD’s knowledge middle chief, Forrest Norrod.

The intently held ZT Techniques has roughly 2,500 workers of which AMD plans to retain about 1,000 engineers. Presently, ZT Techniques generates annual income of roughly $10 billion, Su mentioned.

Executives count on the deal to shut within the first half of 2025 and count on an extra 12 to 18 months to promote the manufacturing enterprise.

Nvidia CEO Jensen Huang mentioned on the firm’s developer convention in March that the one-time chip designer now creates and sells whole knowledge facilities, or the person parts wanted to construct one. This 12 months analysts count on the corporate to generate $105.9 billion from its knowledge middle section, which incorporates chips and different AI {hardware}. Su mentioned final month the corporate expects to gather roughly $4.5 billion price of AI chip income this 12 months. The corporate’s clients embody Microsoft and Meta Platforms.

AMD expects ZT Techniques to contribute to the corporate’s adjusted monetary efficiency by the top of 2025.