Advanced Micro Devices (AMD) is a semiconductor company that produces high-performance computer processors used in various devices. Their powerful processors are commonly used in AI workloads due to their computational capabilities and efficiency. The company competes with industry giants like Intel and Nvidia, providing cutting-edge technology for both consumer and enterprise applications. The Santa Clara, California-based company announced plans to acquire computer hardware design firm ZT Systems for $4.9 billion Monday before the market opened, aiming to strengthen its position and better compete with industry giants like Nvidia.
AMD expects to close the $4.9 billion deal in the first half of 2025, giving it less than a year to finalize the transaction. The company plans to finance the acquisition of ZT Systems with a payment structure of 75% cash and 25% stock. ZT Systems currently generates over $10 billion in annual revenue, which is expected to provide a significant boost to AMD’s future earnings. AMD CEO Lisa Su told The Wall Street Journal that she plans to sell ZT’s manufacturing business while retaining its system design division, focusing on maximizing value for the company.
Additionally as reported by Patrick Seitz, Investors Business Daily author, “Last week, AMD completed its $665 million acquisition of Silo AI, the largest private AI lab in Europe.” Seitz says this acquisition is “the latest move by AMD to become more of a complete AI systems provider like AI chip rival Nvidia.” Following the report, AMD’s stock jumped 4.5% on Monday, closing at approximately $155.28. Investors in both Nvidia and AMD should monitor this development closely to assess its potential impact on the future of both companies.
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