Advanced Micro Devices Inc (AMD) has agreed to buy server maker ZT Systems Inc in a cash and stock transaction valued at US$4.9 billion, adding data center technology that would bolster its efforts to challenge Nvidia Corp.
ZT Systems, based in Secaucus, New Jersey, would become part of AMD’s Data Center Solutions Business Group, it said in a statement yesterday.
AMD would retain the business’ design and customer teams and look to sell the manufacturing division. The deal price includes a contingent payment of US$400 million based on certain milestones.
Photo: Bloomberg
AMD shares rose 2.5 percent in premarket trading yesterday after the news.
Closely held ZT has extensive experience making server computers for owners of large data centers — the kind of customers that are pouring billions of dollars into new artificial intelligence (AI) capabilities.
The acquisition would “significantly strengthen our data center AI systems,” AMD chief executive officer Lisa Su (蘇姿丰) said in the statement.
The company has its sights set on Nvidia, the runaway leader in the market for data center gear needed to support AI computing. AMD is adding software and hardware capabilities that would better match the breadth of Nvidia’s offerings and speed up the uptake of its chips.
AMD is the second-biggest provider of the graphics processors that have become so vital to developing AI software. The company has spent more than US$1 billion in the past 12 months to expand its reach in that market.
Last month, the company agreed to buy Silo AI for US$665 million to add a maker of artificial intelligence models.
Santa Clara, California-based AMD is seen as Nvidia’s closest rival in AI processors.
Its new MI range of accelerator chips would bring in more than US$4.5 billion of new revenue this year, the company has projected.
That puts it ahead of all other challengers to Nvidia, but still way behind. Analysts expect Nvidia to generate US$100 billion in data center revenue this fiscal year.
Part of Nvidia’s expansion has been fueled by offering chips, networking, servers, software and services, all aimed at making AI use more pervasive in the economy. Under Su’s leadership, AMD is showing a commitment to match that reach.
AMD shares rose less than 1 percent in New York trading on Friday, leaving the stock little changed this year, but gains over recent years have pushed its market value to US$240 billion, more than twice that of longtime rival Intel Corp.
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
Intel Corp is joining Elon Musk’s long-shot effort to develop semiconductors for Tesla Inc, Space Exploration Technologies Corp and xAI, marking a surprising twist in the chipmaker’s comeback bid. Intel would help the Terafab project “refactor” the technology in a chip factory, the company said on Tuesday in a post on X, Musk’s social media platform. That is a stage in the development process that typically helps make chips more powerful or reliable. The chipmaker’s shares jumped 4.2 percent to US$52.91 in New York trading on Tuesday. The Terafab project is a grand plan by Musk to eventually manufacture his own chips for
RSS