Here’s why AMD stock is up 3% right now
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Key points AMD acquired AI infrastructure firm ZT Systems for $4.9 billion. The purchase should help the AI chip maker better compete in the lucrative data center space. This is AMD’s second AI-related acquisition in a week. The semiconductor company acquired an AI infrastructure firm to challenge NVIDIA’s data center dominance. Advanced Micro Devices (NASDAQ: AMD) stock was up about 3% Monday after the semiconductor firm announced it was buying an AI infrastructure provider to bolster its clouding computing capabilities at data centers. AMD acquired ZT Systems in a cash and stock deal valued at $4.9 billion. ZT Systems provides the AI infrastructure that supports large hyperscale computing providers; major companies like Microsoft, for example, that require the scale and infrastructure to process massive amounts of cloud computing data at data centers. NVIDIA (NASDAQ:NVDA), AMD’s chief rival, has dominated in this space, with some analysts estimating that its AI graphics processing units (GPUs) own 98% of the market share at data centers. Data centers have been the primary driver of NVIDIA’s huge revenue gains in recent years. AMD, which also makes AI GPUs, is far behind in this area, but the acquisition of ZT Systems could help it gain ground. Accelerating data center growth ZT Systems cloud computing infrastructure solutions will help cloud and enterprise customers significantly accelerate the use of AMD’s AI infrastructure at scale. AMD Chair and CEO Lisa Su called it the next big step in the company’s long-term AI strategy “ZT adds world-class systems design and rack-scale solutions expertise that will significantly strengthen our data center AI systems and customer enablement capabilities,” Su said. “This acquisition also builds on the investments we have made to accelerate our AI hardware and software roadmaps.” In an interview with Reuters, Su explained that the “main way (ZT Systems) is…
Filed under: News - @ August 20, 2024 7:25 am