AMD will buy AI infrastructure company ZT Systems for up to $4.9 billion to expand its AI chip and hardware portfolio to better compete with Nvidia. The price includes a potential contingent payment of $400 million tied to milestones upon completion of the transaction.

The acquisition is expected to accelerate the deployment of AMD's Instinct line of AI-powered data center chips to compete with Nvidia's widely used GPUs. In the past year, AMD has invested more than $1 billion to strengthen its AI ecosystem and boost its AI software services.

Headquartered in Secaucus, New Jersey, ZT Systems has more than 15 years of experience designing and deploying large-scale AI computing and storage infrastructure in data centers for major global cloud service providers and employs approximately 2,500 people. The company currently has annual revenues of approximately $10 billion. Following the acquisition, AMD intends to sell the server manufacturing division of ZT Systems.