09:10 AM EDT, 08/19/2024 (MT Newswires) -- Advanced Micro Devices ( AMD ) on Monday said it agreed to acquire artificial intelligence infrastructure solutions company ZT Systems for roughly $4.9 billion, as the chipmaker looks to strengthen its AI data center growth strategy.

The transaction includes a contingent payment of up to $400 million based on the achievement of certain milestones after its completion. The cash-and-stock deal, which requires approval from regulators, is expected to close in the first half of 2025. AMD estimates the acquisition to be accretive on an adjusted basis by the end of next year.

ZT Systems designs and deploys data center AI compute and storage infrastructure for global cloud companies. Following the completion of the deal, the company will become part of AMD's data center solutions business group.

ZT Systems CEO Frank Zhang is set to lead the firm's manufacturing business, while President Doug Huang will oversee the design and customer enablement teams, according to the statement. AMD said it will seek a strategic partner to purchase ZT Systems' US-based data center infrastructure manufacturing business.

"Our acquisition of ZT Systems is the next major step in our long-term AI strategy to deliver leadership training and inferencing solutions that can be rapidly deployed at scale across cloud and enterprise customers," AMD Chief Executive Lisa Su said in a statement. The transaction is anticipated to "significantly" strengthen the chipmaker's data center AI systems and customer enablement capabilities, according to Su.

AMD has invested more than $1 billion to strengthen and expand its AI ecosystem and software capabilities over the past year, the company said. Last week, AMD completed its acquisition of private artificial intelligence lab Silo AI for about $665 million. It also bought Mipsology and Nod.ai last year as part of its AI growth strategy.

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