AMD has announced its acquisition of ZT Systems, a server maker, for $4.9 billion. This strategic move is part of AMD's efforts to expand its data center AI capabilities and compete more effectively with Nvidia in the AI market. The acquisition involves a combination of cash and stock, with 75% of the payment in cash and 25% in stock. Additionally, there is a contingent payment of up to $400 million based on certain post-closing milestones , .

ZT Systems is known for its hyperscale server solutions, which are crucial for AI infrastructure. AMD plans to leverage ZT's design and manufacturing capabilities to enhance its GPU server design capabilities. This acquisition is expected to be accretive on a non-GAAP basis by the end of 2025 , .

AMD's acquisition of ZT Systems is seen as a significant step in its strategy to strengthen its position in the AI market, where Nvidia currently holds a dominant position. The deal also includes plans to spin out and sell ZT's manufacturing assets, focusing instead on the systems design capabilities , .

This acquisition is part of a broader trend of mergers and acquisitions in the tech industry, with companies seeking to enhance their capabilities in AI and data center technologies. The Biden Administration is closely monitoring such deals to ensure fair competition in the market , .