AMD: AMD Stock Jumps 4.5% on $4.9B Purchase of AI Server Maker. Nvidia Challenged?

ZT Systems, maker of data-center equipment for cloud computing and artificial intelligence, is intended to help AMD chip away at Nvidia’s gigantic market share.

• AMD stock AMD advanced 4.5% on Monday after the company said it has agreed to purchase ZT Systems for $4.9 billion in cash and stock. ZT Systems is a provider of artificial-intelligence equipment for computing companies (servers and the likes). With the acquisition, AMD is taking on its arch-rival Nvidia NVDA in the race to build out the infrastructure layer of AI, where Nvidia has a towering, formidable presence.
• More precisely, AMD bets on ZT Systems to help accelerate the production and distribution of its Instinct line of AI data center chips — these bad boys compete with Nvidia’s dominant graphics processing units (GPUs). It’s worth noting that AMD is likely getting a head start as privately-held ZT Systems is already supplying AI products to some big names in tech, including Microsoft MSFT, Meta META and Amazon AMZN.
• ”It brings a thousand world-class design engineers into our team, it allows us to develop silicon and systems in parallel and, most importantly, get the newest AI infrastructure up and running in data centers as fast as possible,” said AMD’s chief executive Lisa Su in an interview with the Financial Times. Su, who is a cousin of Nvidia CEO Jensen Huang, also said that this purchase will help AMD speed up the deployment of its technology.