By Shona Ghosh, Bloomberg
Nvidia Corp. has struck a deal to invest $2 billion into chip-design software maker Synopsys Inc.’s stock as part of a broader engineering and design tie-up, the latest massive investment by the chipmaker into one of its own suppliers.
Nvidia purchased the shares at $414.79 each, the companies said in a statement on Monday, compared with a closing price of $418.01 on Friday.
The stake represents 2.6% of Synopsys’ outstanding shares. The Sunnyvale-based company is one of the largest providers of software and services used to design electronic components.
Shares in Synopsys were up 7.4% in pre-market trading. The stock was down almost 14% so far this year through Friday’s close. Shares in Nvidia were slightly down in pre-market trading.
Nvidia, the most valuable company in the world, has invested in a series of companies with the boom in artificial intelligence, including OpenAI and data center operators such as CoreWeave Inc. It even agreed to invest $5 billion in Intel Corp., a potential rival, as part of a partnership to co-develop chips for personal computers and data centers.
Those investments have raised concerns of circular deals that prop up the valuations of certain companies and put money into the hands of customers, who in turn buy chips from Nvidia.
Synopsys’ software aids with designing the complex layout of billions of transistors and connectors for modern chips, and also verifies that the hardware will work as intended before the production stage. That process is integral to creating chips central to artificial intelligence systems, such as those sold by Nvidia.
The new partnership involves integrating Nvidia’s tools into Synopsys’ chip-design applications, deploying AI agents and joint marketing activities.
Synopsys’ tech is used by a “broad list” of semiconductor and systems companies, including Alphabet Inc. and Tesla Inc., said Bloomberg Intelligence analyst Niraj Patel. The move will allow it to to use more advanced chips for its own design and simulation tools for the automotive, aerospace, industrial and energy sectors, he said.
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