Advanced Micro Devices (AMD) has successfully completed a $4.9 billion acquisition of ZT Systems, a move aimed at strengthening its foothold in the AI infrastructure market.

This acquisition will allow AMD to integrate its CPU and GPU technology with ZT's open-source AMD ROCm software and rack-scale systems capabilities, enhancing its AI solutions.

The deal aligns with AMD's broader strategy to expand its presence in the AI sector, which includes the launch of advanced products like the 5th Gen EPYC processors and Instinct MI325X accelerators.

The acquisition brings approximately 1,000 design engineers from ZT Systems into AMD's workforce, bolstering its engineering capabilities.

This strategic move is designed to reduce deployment time for AI systems in data centers, providing a competitive edge in a rapidly evolving market.

AMD's CEO, Lisa Su, highlighted that the company is focused on delivering comprehensive solutions rather than merely chips, contrasting its approach with Nvidia's more controlled model.

Su also noted that AI adoption is still in its early stages, with demand growing faster than anticipated, positioning AMD as a serious competitor in the AI data center sector.

As part of this transition, AMD is planning to divest ZT's data center manufacturing business while engaging with potential strategic partners for this sale.

ZT Systems will now operate under AMD's Data Center Solutions business unit, led by Executive Vice President Forrest Norrod, who emphasized the importance of optimizing cluster-level data center AI systems.

The acquisition is expected to positively impact AMD's financials on an adjusted basis by the end of 2025, aligning with the company's timeline to finalize the deal.

Key executives from ZT Systems, including Frank Zhang and Doug Huang, have joined AMD's leadership team, indicating a well-planned integration strategy for the acquisition.

This acquisition mirrors Nvidia's 2019 purchase of Mellanox Technologies, which significantly enhanced Nvidia's capabilities in AI infrastructure.