AMD buys ZT for $4.9 billion to spice up AI GPU capabilities

AMD has a string of AI-related investments; this one focuses on hyperscaler AI compute

In its continued pursuit of a stronger arsenal of synthetic intelligence capabilities, chip firm AMD introduced one other main acquisition: A $4.9 billion cash-and-stock settlement to amass New Jersey-based ZT Programs, which supplies AI and general-purpose compute for hyperscalers.

“The strategic transaction marks the following main step in AMD’s AI technique to ship management AI coaching and inferencing options primarily based on innovating throughout silicon, software program and techniques,” AMD mentioned in a launch. “ZT Programs’ in depth expertise designing and optimizing cloud computing options can even assist cloud and enterprise clients considerably speed up the deployment of AMD-powered AI infrastructure at scale.”

AMD mentioned that after closing—which is anticipated within the first half of 2025—it would search for a purchaser to amass ZT Programs’ U.S.-based knowledge middle infrastructure manufacturing enterprise. Printed press studies speculated that the 1,000 cloud knowledge engineers that ZT Programs brings to AMD are on the core of the worth that AMD noticed within the enterprise.

“Our acquisition of ZT Programs is the following main step in our long-term AI technique to ship management coaching and inferencing options that may be quickly deployed at scale throughout cloud and enterprise clients,” mentioned AMD Chair and CEO Dr. Lisa Su. “ZT provides world-class techniques design and rack-scale options experience that may considerably strengthen our knowledge middle AI techniques and buyer enablement capabilities. This acquisition additionally builds on the investments we have now made to speed up our AI {hardware} and software program roadmaps. Combining our high-performance Intuition AI accelerator, EPYC CPU, and networking product portfolios with ZT Programs’ industry-leading knowledge middle techniques experience will allow AMD to ship end-to-end knowledge middle AI infrastructure at scale with our ecosystem of OEM and ODM companions.”

A brand new report from Futurum Intelligence estimates that the GPUs accounted for 74% of chipsets utilized in AI purposes inside knowledge facilities; it expects the GPU market in knowledge facilities to see a compound annual progress price of 30% over the following 5 years, with the market leaping from $28 billion in 2023 to $102 billion by 2028. Futurum mentioned that Nvidia held 92% of the market share for GPUs in early 2024. 

In July of this yr, AMD introduced that it’s shopping for the largest personal synthetic intelligence lab in Europe, Silo AI, for $665 million in money, to bolster AI options for enterprise that may leverage AMD’s chips; that transaction closed earlier this month. The transfer was extensively seen as an effort by AMD to not solely higher allow its clients to construct AI fashions primarily based on AMD chip platforms, however to assist the corporate compete higher in opposition to Nvidia.

“AI is our primary strategic precedence, and we proceed to spend money on each the expertise and software program capabilities to help our rising buyer deployments and roadmaps,” mentioned Vamsi Boppana, AMD senior vice chairman, AIG, upon closing of the Silo AI transaction.

AMD has been on an AI shopping for spree, buying Mipology and Nod.ai and investing greater than $125 million in a dozen different AI corporations up to now 12 months. The corporate mentioned that, excluding the ZT Programs transaction, it has invested greater than $1 billion to broaden the AMD AI ecosystem and strengthen its AI software program capabilities.

Wanting again past 12 months, the corporate spent tens of billions within the final couple of years to purchase Xilinx and Pensando Programs.