![](https://www.pymnts.com/wp-content/uploads/2024/04/AI-artificial-intelligence.jpg)
Advanced Micro Devices (AMD) announced on Monday its plans to acquire server manufacturer ZT Systems for $4.9 billion. The strategic move is aimed at expanding AMD’s portfolio in artificial intelligence (AI) chips and hardware, intensifying its competition with industry giant Nvidia.
According to Reuters, AMD will finance 75% of the acquisition using cash, with the remaining portion paid in stock. As of the second quarter, the semiconductor company held $5.34 billion in cash and short-term investments. “AI systems are our number one strategic priority,” AMD CEO Lisa Su stated in an interview with Reuters.
The acquisition of ZT Systems is expected to significantly bolster AMD’s capabilities in AI technology. By integrating ZT Systems’ engineering talent, AMD plans to accelerate the testing and deployment of its latest AI graphics processing units (GPUs) at the scale required by cloud computing leaders like Microsoft, Su explained.
“The main way ZT Systems is additive to the company is we sell more GPUs,” Su said, highlighting the critical role that ZT Systems will play in expanding AMD’s market reach in the AI sector.
Read more: South Korean AI Chip Makers Rebellions and Sapeon to Merge
The increasing computational demands of AI have driven technology companies to cluster thousands of chips together to achieve the necessary processing power. As a result, the configuration of entire server systems has become a key factor in performance, making AMD’s acquisition of ZT Systems a strategic move to enhance its offerings in this space.
Following the news, AMD’s shares saw an increase of more than 2%, while Nvidia’s shares rose by 1.4%.
Creative Strategies CEO Ben Bajarin commented on the deal, saying, “No doubt this gives them much stronger lock-in with their data center customers, and because of that, the acquisition is a net positive for their long-term revenue strategy.”
Featured News
Kroger Seeks to Block FTC Merger Case in Federal Court
Aug 19, 2024 by
CPI
LifeWallet Reaches $3.1 Million Settlement in Antitrust Case Against Drug Manufacturer
Aug 19, 2024 by
CPI
More States Join DOJ’s Antitrust Case Against Live Nation-Ticketmaster
Aug 19, 2024 by
CPI
Pilgrim’s Pride to Pay $100 Million in Settlement Over Alleged Farmer Pay Suppression
Aug 19, 2024 by
CPI
AMD to Acquire Server Maker ZT Systems for $4.9 Billion in AI Push
Aug 19, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Editorial Board Antipasto
Aug 8, 2024 by
CPI
EU Antitrust Enforcement in Labor Markets – A Little Less Conversation and a Little More Action
Aug 8, 2024 by
James Killick, Peter Citron & Nina Frie
The Talent Trap: Acqui-Hires and Non-Competes from an Antitrust Perspective
Aug 8, 2024 by
Kah Tham & Stephen Kinsella
Information Exchange – Pitfalls from Recent Case Law and Enforcement Practice, and How to Avoid Them
Aug 8, 2024 by
Kyriakos Fountoukakos, Nicoleta Sendrea & Riku Ode
The American Express Decision and its Critics
Aug 8, 2024 by
David Evans & Richard Schmalensee