This includes a contingent payment of up to US$400 million based on certain post-closing milestones.

AMD expects the transaction to be accretive on a non-GAAP basis by the end of 2025.

Following the acquisition, ZT will join the AMD data centre solutions business group.

ZT CEO Frank Zhang will lead the manufacturing business and ZT president Doug Huang will lead the design and customer enablement teams, both reporting to AMD executive vice president and general manager Forrest Norrod.

AMD will seek a strategic partner to acquire ZT Systems’ industry-leading US-based data centre infrastructure manufacturing business.

“This acquisition also builds on the investments we have made to accelerate our AI hardware and software roadmaps,” says AMD chair and CEO Dr Lisa Su.

“Combining our high-performance Instinct AI accelerator, EPYC CPU, and networking product portfolios with ZT Systems’ industry-leading data center systems expertise will enable AMD to deliver end-to-end data centre AI infrastructure at scale with our ecosystem of OEM and ODM partners.”

Headquartered in Secaucus, New Jersey, ZT Systems designs and deploys data centre AI compute and storage infrastructure at scale for cloud companies.

“AMD shares our vision for the important role our technology and our people play designing and building the computing infrastructure powering the largest data centres in the world,” says ZT Systems CEO Frank Zhang.

Last July, AMD acquired Finnish AI company Silo AI for US$665 million to counter rival Nvidia.