Nvidia is investing two billion dollars into Synopsys, a company that makes software and components for designing semiconductor chips. This deal deepens their existing partnership at a time when analysts have started to scrutinize increasingly common circular AI-industry deals and warn of a potential bubble.
Nvidia purchased Synopsys shares at $414.79 each as part of a multi-year partnership. The goal is to integrate Nvidia’s AI hardware and computing capabilities into Synopsys’s electronic design automation and simulation software. This collaboration will help Synopsys transition its platform from CPU-based computing to GPUs, a shift intended to speed up chip-design workflows.
The investment gave Synopsys’s stock a lift by signaling long-term growth. This was a welcome boost after the company recently reported weakness in its intellectual property segment due to U.S. export restrictions and issues at a major customer.
For Nvidia, the investment strengthens its influence over Synopsys’s widely used chip design tools at a time when competition in chip design is heating up. This move also follows recent sales of Nvidia stock by major investors, including SoftBank and Peter Thiel.