— Strategic acquisition gives AMD industry-leading systems expertise to accelerate deployment of optimized rack-scale solutions to address $400 billion data center AI accelerator market by 2027 —
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ZT Systems, a leading provider of AI and general-purpose computing infrastructure to the world’s largest hyperscale providers, offers extensive AI systems expertise that complements AMD’s silicon and software capabilities.
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Adds world-class design and customer enablement team to accelerate adoption of AMD AI rackscale systems to cloud and enterprise customers
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AMD Seeks Strategic Partner to Acquire ZT Systems’ Industry-Leading Manufacturing Business
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The transaction is expected to be accretive to non-GAAP earnings by the end of 2025
SANTA CLARA, Calif., Aug. 19, 2024 (GLOBE NEWSWIRE) — AMD (NASDAQ: AMD) today announced it has signed a definitive agreement to acquire ZT Systems, a leading provider of AI infrastructure for the world’s largest hyperscale computing companies. This strategic transaction marks the next major step in AMD’s AI strategy to deliver leadership AI training and inference solutions based on innovation across silicon, software and systems. ZT Systems’ extensive experience designing and optimizing cloud computing solutions will also help significantly accelerate large-scale adoption of AMD-powered AI infrastructure for cloud and enterprise customers.
AMD has agreed to acquire ZT Systems in a cash and stock transaction valued at $4.9 billion, including a contingent payment of up to $400 million following certain milestones after the acquisition closes. AMD expects the transaction to be accretive to non-GAAP earnings by the end of 2025.
“The acquisition of ZT Systems marks the next major step in our long-term AI strategy to provide leadership training and inference solutions that can be deployed quickly at scale across our cloud and enterprise customers,” said Dr. Lisa Su, AMD Chairman and CEO. “ZT brings world-class system design and rack-scale solution expertise that will significantly strengthen our data center AI systems and customer enablement capabilities. This acquisition also builds on the investments we have made to accelerate our AI hardware and software roadmap. Combining our high-performance Instinct AI accelerators, EPYC CPUs and networking product portfolio with ZT Systems’ industry-leading data center systems expertise will enable AMD to deliver end-to-end data center AI infrastructure at scale with an ecosystem of OEM and ODM partners.”
Headquartered in Secaucus, New Jersey, ZT Systems has over 15 years of experience designing and deploying large-scale data center AI computing and storage infrastructure for the world’s largest cloud companies. ZT Systems’ design, integration, manufacturing and deployment capabilities make it one of the leading providers of AI training and inference infrastructure.
“We are excited to join AMD and together we can play an even bigger role in designing the AI infrastructure that will define the future of computing,” said Frank Zhang, CEO of ZT Systems. “For nearly three decades, we have evolved our business to become a leading provider of critical compute and storage infrastructure for the world’s largest cloud companies. AMD shares our same vision for the critical role our technology and people play in designing and building the computing infrastructure that powers the world’s largest data centers.”
Following the closing of the transaction, ZT Systems will join the AMD Datacenter Solutions business group. ZT CEO Frank Zhang will lead the manufacturing business and ZT President Doug Huang will lead the design and customer enablement teams, both reporting to AMD executive vice president and general manager Forrest Norrod. AMD will seek a strategic partner to acquire ZT Systems’ industry-leading U.S.-based datacenter infrastructure manufacturing business.
The acquisition of ZT Systems is the latest in a series of investments to significantly strengthen AMD’s AI capabilities. Over the past 12 months, AMD has invested more than $1 billion to expand the AMD AI ecosystem and enhance its AI software capabilities, in addition to increasing organic research and development activity.
Additional Transaction Details
The transaction was unanimously approved by AMD’s Board of Directors. The acquisition is currently expected to close in the first half of 2025, subject to certain regulatory approvals and other customary closing conditions.
Conference Call and Webcast Details
AMD will host a conference call with the financial community today at 8:30 a.m. EDT to discuss the transaction. AMD will provide a real-time audio broadcast of the conference call on the Investor Relations page of its website at ir.amd.com. The webcast will be available for 12 months following the call.
Advisor
Citi is acting as exclusive financial advisor to AMD and Latham & Watkins LLP is serving as legal advisor. Goldman Sachs & Co. LLC is acting as exclusive financial advisor to ZT Systems, and Paul, Weiss, LLP is serving as legal advisor.
About AMD
For more than 50 years, AMD has been driving innovation in high-performance computing, graphics and visualization technology. AMD employees are dedicated to developing leadership, intelligent and adaptable products that push the boundaries of what’s possible. Billions of people around the world, leading Fortune 500 companies and cutting-edge scientific research institutions rely on AMD technology every day to improve how they live, work and play. To learn more about how AMD enables today and inspires tomorrow, visit the AMD (NASDAQ: AMD) website, blog, LinkedIn, and www.amad.com/company. X page.
About the ZT System
ZT Systems is a leading supplier of hyperscale server solutions for cloud computing and artificial intelligence. With over 29 years of experience, ZT Systems is headquartered in Secaucus, New Jersey. With global manufacturing across the US, EMEA and APAC, ZT Systems delivers on its mission to power the digital world with cutting-edge technology infrastructure for cloud and AI. For more information, visit ztsystems.com.
Notes
Statements in this press release contain forward-looking statements regarding Advanced Micro Devices, Inc. (AMD), ZT Systems, the proposed transaction described herein, and other matters. Forward-looking statements are based on current beliefs and discuss goals, intentions and expectations regarding future plans, trends, events, results of operations and financial condition, among other things, and involve a number of risks and uncertainties that could cause actual results to differ materially from expectations. Forward-looking statements speak only as of the date on which the statements are made or indicated in the statements, and there can be no assurance that the events or circumstances reflected in such statements will be achieved or occur, and therefore should not be relied upon as predictions of future events. Forward-looking statements can often, but not always, be identified by the use of words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “pro forma,” “estimates,” “anticipates,” “designed,” or the negative of these words or phrases, other variations of these words or phrases, or similar terminology. Forward-looking statements in this press release relate to, among other things, the opportunity for the data center AI accelerator, obtaining applicable regulatory approvals, the satisfaction of other closing conditions to the transaction, the expected timing of the transaction and the integration of the businesses, the divestiture of ZT Systems’ manufacturing business and the expected benefits, accretion, synergies and growth resulting therefrom. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated in the statements. These risks include, among other things, the failure to obtain applicable regulatory approvals in a timely manner or otherwise. the failure to satisfy other closing conditions to the transaction or to complete the transaction on the expected terms and timing; adverse effects from the announcement of the transaction; the risk that the businesses will not be successfully integrated; AMD may not be able to divest ZT Systems’ manufacturing business on a timely basis or at all or AMD may not realize the expected benefits, cost savings, accretion, synergies and/or growth or such benefits may take longer to realize than expected; risks that disruptions from the transaction may adversely affect business plans and operations; risks related to unexpected costs of integrating and divesting ZT Systems’ manufacturing business; significant transaction, integration and separation costs or difficult and/or unknown or unestimable liabilities related to the transaction or divestiture of ZT Systems’ manufacturing business; restrictions pending the transaction that may affect the ability to pursue certain business opportunities or strategic transactions; the potential impact of the announcement or consummation of the transaction or divestiture of the ZT Systems manufacturing business on AMD’s, ZT Systems’ or the combined company’s relationships with suppliers, customers, employees and regulatory authorities and demand for AMD’s, ZT Systems’ or the combined company’s products. For a description of factors that could cause actual results to differ materially from those contemplated in the forward-looking statements, see the section entitled “Risk Factors” in AMD’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023, any subsequent Quarterly Reports on Form 10-Q, and other filings with the SEC. While the list of factors set forth herein is believed to be representative, such list is not intended to be a complete description of all potential risks and uncertainties. Factors not listed could be significant additional obstacles to the realization of the forward-looking statements. AMD is under no obligation, and disclaims any obligation, to update any forward-looking statements, except as required by law.
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