Silicon vendor AMD introduced a strategic transfer to considerably increase its information heart AI programs capabilities with the acquisition of ZT Methods, a number one supplier of AI infrastructure for hyperscale computing corporations.
The deal, valued at an enormous $4.9 billion, marks a significant step in AMD’s long-term AI technique and is aimed toward positioning the corporate to compete extra successfully within the quickly rising information heart AI market.
The acquisition, introduced on Monday (August 19), will mix AMD’s high-performance Intuition AI accelerators, EPYC CPUs, and networking merchandise with ZT Methods’ expertise in designing and deploying information heart AI compute and storage infrastructure at scale.
Following the transaction’s shut, ZT Methods will probably be built-in into AMD’s Knowledge Heart Options Enterprise Group.
“ZT provides world-class programs design and rack-scale options experience that may considerably strengthen our information heart AI programs and buyer enablement capabilities,” Dr Lisa Su, AMD Chair and CEO, mentioned in an announcement this week.
With all eyes on the quickly evolving semiconductor market, we spoke with analysts to listen to what the acquisition means for the information facilities that underpin the AI growth.
‘Extra Competitors than Ever’
Trade consultants counsel that the acquisition is not going to solely place AMD as a stronger competitor to Nvidia but additionally assist it additional distance itself from rival Intel, which has struggled financially.
“The incumbent information heart CPU distributors, Intel and AMD, are dealing with extra competitors than ever as massive cloud service suppliers develop and deploy their very own Arm-based CPUs,” Vladimir Galabov, analysis director at Omdia’s cloud and information heart observe, informed DCN.
Galabov famous that computing is more and more carried out outdoors the CPU. Servers configured with many co-processors are used at scale for environment friendly safety, media, and AI functions – and that is only the start. He added that within the face of those challenges, Intel is changing into a foundry seeking to manufacture the processors others design.
“With the acquisition of ZT Methods, AMD is sending us a transparent sign that they aren’t giving up however quite growing a vertically built-in resolution like Nvidia,” Galabov mentioned
Santa Clara-based AMD will purchase ZT Methods $4.9 billion
In line with Galabov, it’s usually neglected that Nvidia’s benefit doesn’t come merely from its GPUs, Nvidia additionally developed an industry-leading networking and software program stack.
“With ZT Methods on board, AMD will have the ability to develop a rack-scale design or perhaps a cluster-scale design in-house,” Galabov mentioned. “Don’t be shocked to see them purchase a software program firm subsequent.”
Paul Schell, {industry} analyst at world expertise intelligence agency ABI Analysis additionally sees the AMD acquisition as a play towards Nvidia. In his view, AI chip distributors are taking part in catch-up to market chief Nvidia, whose dominance stems from particular person chip efficiency to total systems-level designs consisting of interconnected servers, racks, and clusters.
“The subsequent era of AI fashions at scale would require optimized options throughout particular person silicon all the best way as much as your entire domain-specific information heart, and ZT’s legacy in programs design consists of massive deployments for hyperscalers,” Schell informed DCN.
“Together with the remainder of AMD’s AI information heart portfolio, this buy supplies a extra holistic providing, which has the potential to spice up their information heart scale providing.”
Challenges with AMD’s Acquisition of ZT Methods
For Ben Bajarin, CEO and principal analyst at Artistic Methods, there are some considerations about AMD’s acquisition of ZT Methods.
The principle subject is whether or not the deal will allow AMD to be a bigger participant in information heart buildouts total, as ZT Methods at the moment additionally works with Intel and others.
“AMD is saying they may divest of the broader enterprise not associated to AMD, so we don’t know the way that may work out, whether or not they promote it off or one thing else,” Bajarin informed DCN. “But when ZT programs underneath AMD continues to construct programs for Intel, Nvidia, and so on., it might elevate antitrust points.”
In his view, the acquisition is actually about AMD’s personal customized vertical design round its personal programs. He added that the aim is to assist AMD develop its personal enterprise within the information heart, and broadly the expectation is that AMD goes to develop that enterprise regardless.
“This simply helps them be concerned even on the rack design [and] cooling… stage, which the aim is to learn solely AMD and never others,” he mentioned.
AMD Intuition MI300X accelerator for AI workloads
One other Milestone in AMD’s Knowledge Heart Technique
Daniel Newman, CEO of The Futurum Group, sees the ZT Methods acquisition as one other important step in AMD’s total progress technique.
Newman informed DCN that over the previous 12 months, AMD has been aggressively investing in software program and consulting providers corporations to allow it to develop extra quickly into what it has described as a $400 billion AI Chips (GPU, XPU) market by the top of 2027.
Learn of the most recent information heart {hardware} information
“AMD is the unchallenged quantity two in information heart AI GPUs and has already seen its $4.5 billion annual forecast Intuition portfolio swell,” Newman mentioned.
“Nonetheless, many buyers and certain AMD insiders all see the chance as considerably bigger given the robust capex demand for AI chips and the perceived curiosity in a significant competitor to tackle Nvidia’s robust moat and pricing energy.”
