Nvidia is investing $2 billion in Synopsys, which makes software and components for semiconductor chip design. The deal deepens the companies’ existing partnership as analysts begin to scrutinize the increasingly common circular trades in the AI industry and warn of potential bubbles.
Nvidia announced that it has purchased Synopsys stock for $414.79 per share as part of a multi-year partnership to integrate Nvidia’s AI hardware and computing capabilities with Synopsys’ electronic design automation (EDA) and simulation software. The deal will help Synopsys transition its platform from CPU-based computing to GPUs, a move the company hopes will speed up chip design workflows, according to the release.
The deal boosted Synopsys’ stock price by suggesting long-term growth. This was a boon after the company recently reported weakness in its intellectual property division due to U.S. export restrictions and issues with major customers.
For Nvidia, the investment strengthens Synopsys’ influence in widely used EDA tools at a time when chip design competition is starting to intensify. It also comes after major investors including SoftBank and Peter Thiel sold their positions in Nvidia.
