Advanced Micro Devices has completed its $4.9 billion purchase of ZT Systems, a designer of data-center equipment for cloud computing and artificial intelligence, the company said on Monday.

The deal, first announced last August, marks the latest effort by the chip maker better known as AMD to pump up its data-center systems offerings against its rival Nvidia.

With the acquisition, AMD is able to better maneuver as a player in data-centers for AI -- giving big customers such as Microsoft and Facebook owner Meta Platforms an alternative to Nvidia's dominant chips and servers.

As AI drives up the complexity of hardware integration for customers, AMD needs to provide more than just chips and software, said Chief Executive Lisa Su. "You really have to put the entire system together," she said.

Over the past several years, both Nvidia and AMD have taken greater interest in data-center servers, the infrastructure that goes into the massive server farms that power cloud-computing platforms and AI applications. Servers are the overall systems that house and connect chips and accelerators like graphics processing units, or GPUs.

Nvidia has made a concerted effort to broaden its focus from silicon by taking on a new role as data-center designer -- or an "AI factory," a strategy most associated with Chief Executive Jensen Huang. That means offering a sort of one-stop shop for all the key elements in data centers, including software, design services and networking technology.

With ZT, AMD is aiming to get a piece of the AI factory, too. Where AMD stands out among competitors like Nvidia is by offering a so-called open or open-source ecosystem, rather than a proprietary system with all-inclusive pieces, Su said.

"I'm not at all stating that AMD is going to provide every component for the systems," Su said. "The idea is we want to have all the capability, and then we want to have an open enough ecosystem so that our customers can choose what they want in their environments."

The market for AI computing is big enough for both AMD and Nvidia, according to industry analysts. "We are at the very early stages of AI deployment and adoption," Su said.

The need for AI compute is "orders of magnitude higher" than it was just a year ago, Su said, echoing some of Huang's comments earlier this month at Nvidia's annual conference. At that gathering, Huang said the need for AI computing had surged 100-fold from a year ago.

AMD is taking on ZT Systems' roughly 1,000 design engineers, who specialize in hardware and server design, and adding them to the AMD Data Center Solutions unit, the company said.

Secaucus, N.J.-based ZT Systems is a privately held company that had over $10 billion in annual revenue at the time the deal was announced. As planned, AMD is also in the process of selling ZT's manufacturing unit and is "actively engaged" with multiple potential buyers.

In recent years, AMD has made other acquisitions to bolster its data-center offerings, including the purchases of programmable-chip company Xilinx and data-center networking company Pensando in 2022.