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AMD has agreed to accumulate synthetic intelligence infrastructure group ZT Programs in a $4.9bn money and inventory transaction, extending a run of AI investments by the chip firm because it seeks to problem market chief Nvidia.
The California-based group stated the acquisition would assist speed up the adoption of its Intuition line of AI information centre chips, which compete with Nvidia’s well-liked graphics processing models.
ZT Programs, a personal firm based three many years in the past, builds customized computing infrastructure for the most important AI “hyperscalers”. Whereas the corporate doesn’t disclose its clients, the AI hyperscalers embrace the likes of Microsoft, Meta and Amazon.
It marks AMD’s greatest acquisition because it purchased Xilinx for $35bn in 2022.
“It brings a thousand world-class design engineers into our workforce, it permits us to develop silicon and programs in parallel, and most significantly get the latest AI infrastructure up and operating in information centres as quick as doable,” AMD’s chief govt Lisa Su advised the Monetary Occasions.
“It actually helps us deploy our know-how a lot quicker as a result of that is what our clients are telling us [they need],” Su added.
The transaction is predicted to shut within the first half of 2025, topic to regulatory approval, after which New Jersey-based ZT Programs might be folded into AMD’s information centre enterprise group. The $4.9bn valuation consists of as much as $400mn contingent on “sure post-closing milestones”.
Citi and Latham & Watkins are advising AMD, whereas ZT Programs has retained Goldman Sachs and Paul, Weiss.
The transfer comes as AMD seeks to interrupt Nvidia’s stranglehold on the AI information centre chip market, which earlier this yr noticed Nvidia briefly develop into the world’s most precious firm as large tech corporations pour billions of {dollars} into its chips to coach and deploy highly effective new AI fashions.
A part of Nvidia’s success stems from its “programs” strategy to the AI chip market, providing end-to-end computing infrastructure that features pre-packaged server racks, networking tools and software program instruments to make it simpler for builders to construct AI functions on its chips.
AMD’s ZT Programs acquisition exhibits the chipmaker constructing out its personal “programs” providing. The corporate rolled out its MI300 line of AI chips final yr, and says it should launch its next-generation MI350 chip subsequent yr to compete with Nvidia’s new Blackwell line of GPUs.
In Could, Microsoft was one of many first AI hyperscalers to undertake the MI300, constructing it into its Azure cloud platform to run AI fashions resembling OpenAI’s GPT-4. AMD’s quarterly income for the chips surpassed $1bn for the primary time within the three months to June 30.
However whereas AMD has feted the MI300 as its fastest-ever product ramp, its information centre income nonetheless represented a fraction of the $22.6bn that Nvidia’s information centre enterprise raked in for the quarter to the top of April.
In March, ZT Programs introduced a partnership with Nvidia to construct customized AI infrastructure utilizing its Blackwell chips. “I believe we definitely consider ZT as a part of AMD will considerably speed up the adoption of AMD AI options,” Su stated, however “now we have buyer commitments and we’re definitely going to honour these”.
Su added that she anticipated regulators’ evaluation of the deal to deal with the US and Europe.
Along with rising its analysis and growth spending, AMD says it has invested greater than $1bn over the previous yr to broaden its AI {hardware} and software program ecosystem.
In July the corporate introduced it was buying Finnish AI start-up Silo AI for $665mn, the most important acquisition of a privately held AI start-up in Europe in a decade.
