Nvidia has invested $2 billion in Synopsys, the chip design software company, as part of a multi-year expansion of their partnership. The two firms plan to collaborate on advanced tools that use Nvidia’s artificial intelligence technology to support product design across multiple industries.
The agreement, announced on Monday, positions Nvidia as the seventh-largest stakeholder in Synopsys, according to LSEG data. It also adds to a growing list of Nvidia’s AI-focused partnerships, which have raised concerns about the possibility of overheating in the sector.
In recent months, Nvidia has struck deals ranging from a potential $100 billion investment in OpenAI to a $5 billion stake in Intel. Following the announcement, Nvidia’s shares slipped more than 1%, while Synopsys shares gained 6%.
D.A. Davidson analyst Gil Luria said Nvidia’s influence over the AI computing landscape gives it a strong incentive to shape the industry’s winners. He noted that a closer partnership with Synopsys boosts both companies, with Nvidia also benefiting from any appreciation in Synopsys’ stock.
Strengthening Synopsys’ position
Nvidia, already a customer of Synopsys, purchased roughly 4.8 million shares at $414.79 each, a price slightly below Friday’s close. The purchase was made through a private placement, according to a Synopsys regulatory filing.
Synopsys plans to integrate Nvidia’s developer tools and code libraries into its software used for chip design, physical verification, and other electronic design automation (EDA) processes.
This investment follows a period of recent weakness in Synopsys’ intellectual property division, which the company attributed to export restrictions affecting business in China and challenges linked to a major foundry client, widely believed to be Intel.
The new partnership is not exclusive. Synopsys continues to work with AMD, while Nvidia maintains ties with Cadence Design, a key competitor in the EDA market. After the news, Cadence shares dropped more than 1%.
