AMD is shopping for server maker ZT Programs in a cash-and-stock deal value $4.9 billion because the chipmaker strengthens its synthetic intelligence capability in its efforts to compete with Nvidia.
AMD plans to promote ZT Programs’ server manufacturing enterprise after the deal closes, with mergers and acquisitions in tech and elsewhere getting a better look by the Biden Administration.
ZT Programs, primarily based in Secaucus, New Jersey, is a privately held firm that has designed and rolled out knowledge middle and storage infrastructure methods to cloud corporations for greater than a decade.
The transaction features a contingent cost of as much as $400 million primarily based on post-closing milestones.
AMD is trying to bulk up its AI capabilities. Over the previous yr, the corporate has invested greater than $1 billion to broaden its AI ecosystem and strengthen its AI software program capabilities.
The strikes are a part of an effort to raised compete with tech large Nvidia, which has skilled practically insatiable demand for its chips to energy synthetic intelligence purposes.
As soon as AMD’s cope with ZT Programs closes, it should be a part of the AMD Knowledge Heart Options Enterprise Group. AMD stated Monday that it’ll search for a purchaser for its U.S.-based knowledge middle infrastructure manufacturing enterprise.
The transaction, which was authorised by AMD’s board, is predicted to shut within the first half of subsequent yr.
Shares of AMD, primarily based in Santa Clara, Calif., rose greater than 3% earlier than the market opened.