AMD is buying ZT Systems to strengthen its expertise in server systems. The acquisition focuses on services and support, including approximately 100 system design engineers. AMD plans to sell the manufacturing portion of ZT Systems after closing, as this business is low margin and puts AMD in direct competition with its customers.
AMD's primary objective is to acquire the systems expertise needed to meet the growing needs of its large hyperscale customers, who buy complex systems rather than individual components. This acquisition is a recognition by AMD of its need to enhance its capabilities to remain competitive with competitors such as NVIDIA.
AMD has already invested in a number of areas to complement its offering, including the purchase of networking company Pensando and AI software companies. The addition of the ZT Systems engineers is intended to reinforce this strategy. AMD hopes the additional expertise will enable it to sell more GPUs in the future.
The acquisition, valued at around $4.9 billion before the sale of the manufacturing part, is primarily a talent acquisition deal. AMD is investing to integrate these skills and close the gap with its competitors, who already have well-integrated systems developed in-house.

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