Bottom line: The strategic rationale behind AMD acquiring ZT makes sense, to a point, but $5 billion is a lot to pay, especially when the true value of the transaction relies heavily on the price AMD will get when they spin off ZT's manufacturing unit.
Forward-looking: It's no secret that Nvidia has been the dominant GPU supplier to data centers, but now there is a very real possibility that AMD might become a serious contender in this market as demand grows. AMD was recently approached by a client asking to create an AI training cluster consisting of a staggering 1.2 million GPUs. That would potentially make it 30x more powerful than Frontier, the current fastest supercomputer. AMD supplied less than 2% of data center GPUs in 2023.
"ACDC" (Apple Chips in Data Center) would be the clear winner in 2024's chip naming competition
Editor's take: Of course, Apple is designing its own AI chips for its data centers. This will give them an end-to-end, cloud-to-edge AI system that its competitors will not be able to match anytime soon.