Nvidia’s $2 billion Synopsys bet tightens its grip on its chip design portfolio

Nvidia is investing $2 billion in Synopsys, which makes software and components for designing semiconductor chips. The deal deepens their existing partnership at a time when analysts have begun scrutinizing the circular deals increasingly common in the AI ​​industry and warning of a potential bubble.

Nvidia said it purchased Synopsys shares at $414.79 per share as part of a multi-year partnership to integrate Nvidia’s AI hardware and computing capabilities into Synopsys’ electronic design automation (EDA) and simulation software. The deal will help Synopsys shift its platform from CPU-based computing to GPUs, a shift it hopes will speed up its chip design workflow, depending on the release.

The deal gave Synopsys stock a boost by signaling long-term growth — a boon after the company recently reported weakness in its IP segment due to U.S. export restrictions and issues at a key customer.

For Nvidia, the investment strengthens its leverage over Synopsys’ widely used EDA tools at a time when chip design competition is beginning to intensify. This also comes after major investors such as SoftBank and Peter Thiel sold their positions in Nvidia.