AMD snaps ZT in $7b AI data centre boost

Good morning. Here's what happened overnight and what you need to know today.

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1.

AI ambition: Advanced Micro Devices (AMD) has agreed to acquire server manufacturer ZT Systems in a cash and stock deal valued at USD4.9 billion (7.29 billion). The deal expands AMD’s AI chip and hardware portfolio and bolsters its data centre technology for its ongoing competitive battle against Nvidia. The purchase price includes a contingent payment of USD400 million based on specific milestones, AMD said in a statement. ZT will integrate into AMD’s Data Center Solutions Business Group, with AMD retaining ZT's design and customer teams while planning to sell the manufacturing division. AMD shares rose by up to 3.7% following the announcement. (AMD)(Capital Brief)

2.

Market momentum: Wall Street stocks rose for an eighth session on Monday, with both the S&P 500 index and Nasdaq buoyed by receding recession fears and anticipation of Federal Reserve Chair Jerome Powell’s upcoming speech at Jackson Hole. The Dow Jones Industrial Average gained 0.58%, the S&P 500 added 0.97%, led by gains in the energy sector, and the Nasdaq Composite was up 1.39%. Traders now see a 77.5% chance of a 25 basis point rate cut by the Fed in September, according to the CME FedWatch Tool. That compares with an even split between that and a cut double in magnitude a week ago, before positive jobless claims and retail sales data boosted spirits.

3.

Tokyo takeover?: Canadian convenient store giant Alimentation Couche-Tard approached the Japanese operator of 7-Eleven shops, Japan's Seven & i Holdings, about a potential takeover that could become the largest-ever acquisition of a Japanese firm by a foreign company. Both companies confirmed the talks, first reported by Nikkei, in separate statements. Seven & i acknowledged receiving a non-binding and preliminary proposal to acquire all of its shares. It said it had formed a special committee of independent directors led by chairman Stephen Hayes Dacus, to assess the offer. Although the proposal’s value remains undisclosed, it underscores Western investors' growing interest in Japan. Seven & i’s shares surged nearly 23% following the news, valuing it at around ¥5.6 trillion ($56 billion). Couche-Tard, valued at roughly USD58 billion descried its offer as a "friendly proposal" but cautioned there is no certainty a deal will be reached. (Couche-Tard statement)(Seven & i statement)(The Financial Times)

4.

Slowing info: Chinese authorities have restricted access to daily data on inward investment flows, as global funds continue to pull money of the country’s stock market, The Financial Times reported. The data will only be provided every three months, the publication said citing a link from Stock Connect, which allows foreign investors access to China’s stock market. The move comes as international investors have withdrawn over USD12 billion ($17.8 billion) from Chinese stocks since June, turning year-to-date net flows negative, the publication said quoting Hong Kong stock exchange data. Chinese officials are fighting to shore up market confidence amid investor concern over China’s slowing economy and the impact of a slow-burning crisis in its property sector. In May, Chinese regulators had already cut of live trading data on foreign investors’ dealings. (FT)

5.

Engineering cuts: General Motors is cutting over 1,000 jobs globally in its software and services division, including around 600 positions near its Detroit headquarters, The Wall Street Journal and Bloomberg reported citing an unnamed source familiar with the plans. The move partially reverses a hiring spree in recent years as GM sought to bolster its tech capabilities. The cuts follow a review led by two former Apple executives, Baris Cetinok and Dave Richardson, who were promoted in June to lead the division. In a statement, GM told the publications the company “must simplify for speed and excellence, make bold choices, and prioritize the investments that will have the greatest impact,” without specifying how many staff would be affected. It comes as legacy automakers try to keep up with competitors like Tesla and Chinese electric vehicle startups with software-driven features that can be updated wirelessly. (The Wall Street Journal)(Bloomberg)

6.

Yatch tragedy: Mike Lynch, one of the UK’s best-known tech entrepreneurs, is missing after his luxury yacht, Bayesian, sank in a storm off the coast of Sicily on Monday, killing one of the 22 people on board. Lynch’s wife, Angela Bacares, was rescued, but several people remain missing, including Lynch, his 18-year-old daughter and American and Canadian citizens, The Guardian reported. The Italian coastguard confirmed the sinking of the 56m superyacht early Monday morning near Palermo. Lynch had recently been acquitted of 15 counts of fraud in the US related to the USD11 billion ($16 billion) sale of his company, Autonomy, to Hewlett-Packard in 2011. Following the verdict, Lynch had said he was “looking forward to returning to the UK and getting back to what I love most: my family and innovating in my field,” the Financial Times reported. (The Guardian)(FT)

7.

Intelligence swap: The Australian Signals Directorate (ASD) is set to name the successor to outgoing director-general Rachel Noble, with the shortlist narrowed to two leading contenders. Defence sources told Capital Brief the head of the Australian Cyber Security Centre (ACSC), Abigail Bradshaw, and the inaugural Chief of Defence Intelligence, Lieutenant General Gavan Reynolds are the two shortlisted candidates. Noble will step down earlier than her planned December departure after deciding not to seek a second term. Bradshaw has long been considered the logical next boss, though Reynolds is also highly regarded. The appointment will be the first major intelligence appointment under the Albanese government, coming as the ASD undergoes a major transformation amid increasing cyber threats. (Capital Brief)

8.

Synagogue attack: Hamas and Islamic Jihad claimed responsibility for a bomb explosion near a synagogue in Tel Aviv on Sunday that Israeli police and the Shin Bet intelligence agency described as a terrorist attack. The bomb, carried by a man who was killed when it detonated prematurely, injured a passerby. An Israeli government spokesperson said the man was carrying a backpack loaded with explosives that detonated before he could reach a more heavily populated area, Reuters reported. The attack occurred shortly after US Secretary of State Antony Blinken arrived in Tel Aviv to push for a ceasefire in the ongoing 10-month conflict between Israel and Hamas, which has resulted in over 40,000 deaths in Gaza, according to local health authorities. (Reuters)