On Monday, AMD said it was planning to buy server maker ZT Systems for $4.9B as the company attempts to expand its portfolio of AI chips and hardware and fight Nvidia .
AMD plans to pay for 75% of the acquisition of ZT Systems with cash and the rest in stock. As of the second quarter, the company had $5.34B available in short-term investments and cash.
The computing requirements for AI mean that tech companies combine thousands of chips in clusters to obtain the required amount of data-crunching power. Combining the huge numbers of chips has resulted in the makeup of whole server systems becoming increasingly important. This is the reason AMD is buying ZT Systems.
AMD CEO Lisa Su said AI systems were the firm’s top strategic priority.
Su said adding ZT Systems engineers would enable AMD to more quickly test and roll out its AI GPUs at the scale required by cloud computing giants like Microsoft. The major way in which ZT Systems would add to AMD was that it would sell more GPUs.
AMD’s shares increased by more than 2%, while Nvidia ’s were 1.4% higher.
Su said once the deal closes, AMD would be breaking off its server manufacturing business and selling it.
