Advanced Micro Devices Inc. announced today that it agreed to acquire ZT Systems, a provider of artificial intelligence infrastructure for hyperscale computing providers, to expand solutions for running AI models at large scale.

As part of the deal, AMD said it agreed to pay $4.9 billion for ZT Systems in a mix of cash and stock. Pending certain post-closing performance milestones another $400 million will also be paid out.

The semiconductor manufacturer said that it planned to incorporate the hyperscale provider’s AI and general compute infrastructure to accelerate AI deployments for cloud and enterprise customers.

Headquartered in Secaucus, New Jersey, ZT Systems was founded in 1994, provides complex compute, storage and accelerator solutions. The company works with large companies and chipmakers, including Nvidia Corp. and Intel Corp. to deliver its services to cloud and enterprise customers.

“ZT adds world-class systems design and rack-scale solutions expertise that will significantly strengthen our data center AI systems and customer enablement capabilities,” said AMD Chair and Chief Executive Dr. Lisa Su. “This acquisition also builds on the investments we have made to accelerate our AI hardware and software roadmaps.”

AMD has funneled more than $1 billion in funds to expand its AI ecosystem and strengthen its AI software capabilities in the past 12 months, the company said. In April, the company announced new processors for AI-enabled laptops and desktops to catch up with rivals Nvidia and Intel, which already design AI chips for PCs. And AMD recently announced plans to acquire Silo AI Oy, a Finland-based developer of custom AI models, in July for about $665 million.

“Combining our high-performance Instinct AI accelerator, EPYC CPU, and networking product portfolios with ZT Systems’ industry-leading data center systems expertise will enable AMD to deliver end-to-end data center AI infrastructure at scale with our ecosystem of OEM and ODM partners,” added Su.

Following the close of the deal, ZT Systems will merge with AMD Data Center Solutions Business Group. ZT CEO Frank Zhang will lead the manufacturing business and ZT President Doug Huang will take the lead of the customer and enablement teams. Both will report directly to AMD Executive Vice President and General Manager Forrest Norrod.

AMD said the transaction is expected to close in the first half of 2025.

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