AMD buying server maker ZT Systems for $4.9 billion as chipmakers strengthen AI capabilities

AMD is buying server maker ZT Systems in a cash-and-stock deal worth $4.9 billion as the chipmaker strengthens its artificial intelligence capacity in its efforts to compete with Nvidia.

AMD plans to sell ZT Systems' server manufacturing business after the deal closes, with mergers and acquisitions in tech and elsewhere getting a closer look by the Biden Administration.

ZT Systems, based in Secaucus, New Jersey, is a privately held company that has designed and rolled out data center and storage infrastructure systems to cloud companies for more than a decade.

The transaction includes a contingent payment of up to $400 million based on post-closing milestones.