AMD is acquiring another company, this time server maker ZT Systems. The chip company is willing to fork over 4.9 billion dollars (4.4 billion euros) for this latest purchase in both cash and shares. If the acquisition turns out well, i.e., if ZT Systems earns enough for its new owner, then another 400 million dollars is in store for the new acquisition.
AMD seems particularly interested with ZT Systems’ design and customer teams. It would eventually like to sell off the manufacturing division, Bloomberg states. ZT Systems designs server computers for large data centers. Huge amounts of AI workloads are currently running in those places. That makes the purchase perfectly justifiable for AMD, which has been competing with superpower Nvidia in AI computing.
Leaders are not easily overtaken
AMD is in second place when it comes to sales of GPUs that run AI workloads, mostly for use in data centers harbouring equipment like that of ZT Systems. Nvidia is still well ahead of AMD in that regard. The GPU king expects some 100 billion dollars (90.6 billion euros) in revenue from its data center business this fiscal year alone.
Nvidia not only supplies chips but also provides networking and server equipment, software and services. AMD’s string of acquisitions lately can be seen as the company’s attempt to catch up with its major rival. Just last month, the Santa Clara, California-based company put down 665 million dollars (about 613 million euros at the time) for Finland-based startup Silo AI. It effectively bought an entire AI division, with companies such as Philips and Unilever among its customer base.
Series of acquisitions
In 2022, AMD acquired FPGA maker Xilinx for 49 billion dollars. Customers can assemble field-programmable gate array (FPGA) chips to optimize them for specific purposes. The chips are primarily used in industrial applications but are also part of data center infrastructures.
The 2006 acquisition with which AMD first entered the GPU market was that of Radeon, good for 5.6 billion dollars at the time. Nvidia reigns supreme when it comes to GPUs however, with nearly 98 percent market share in data centers. Regarding CPUs, Intel in particular feels the pressure of AMD. At least in the area of data centers, an increasing amount of vendors are (also) offering AMD chips as an alternative to those from Intel. AMD’s market value is now 240 billion dollars, compared to Intel’s 90-ish billion.
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