Nvidia Corp. announced Monday it has purchased $2 billion of Synopsys Inc. common stock as part of an expanded strategic partnership aimed at revolutionizing engineering and design through accelerated computing and artificial intelligence, sending shares of the chip-design software maker surging 10% in premarket trading.
The AI chip leader bought Synopsys shares at 414.79 per share, slightly below Friday's closing price, marking a substantial vote of confidence in the semiconductor design software provider. The investment comes as Synopsys stock had declined nearly 14% year-to-date through Friday's close, presenting what Nvidia apparently viewed as an attractive entry point.
The multi-year collaboration will integrate Nvidia's CUDA accelerated computing platform with Synopsys' market-leading engineering solutions across chip design, physical verification, molecular simulations and electromagnetic analysis. The partnership specifically targets agentic AI workflows, digital twins through Nvidia Omniverse and cloud-ready engineering solutions accessible to teams of all sizes.
What Happened
The partnership builds on existing technology collaborations between the companies and includes several strategic initiatives. Synopsys will further accelerate its broad portfolio of compute-intensive applications using Nvidia CUDA-X libraries and AI-Physics technologies, spanning chip design, physical verification and optical simulation.
The companies are integrating Synopsys AgentEngineer technology with the Nvidia Agentic AI technology stack, including Nvidia NIM microservices and Nemotron models, to enable autonomous design capabilities for electronic design automation and simulation workflows.
They will also collaborate to enable the next generation of virtual design, testing and validation through highly accurate digital twins for industries including semiconductor, robotics, aerospace, automotive and energy. The solutions will utilize Nvidia Omniverse and Cosmos technologies.
"CUDA GPU-accelerated computing is revolutionizing design, enabling simulation at unprecedented speed and scale, from atoms to transistors, from chips to complete systems, creating fully functional digital twins inside the computer," said Jensen Huang, founder and CEO of Nvidia.
Synopsys President and CEO Sassine Ghazi emphasized that developing next-generation intelligent systems demands engineering solutions with deeper integration of electronics and physics, accelerated by AI capabilities and compute power. "Together we will re-engineer engineering and empower innovators everywhere to more efficiently realize their innovations," Ghazi said.
Why It Matters
The Synopsys investment adds to Nvidia's expanding web of partnerships in the artificial intelligence ecosystem, raising fresh concerns about increasingly circular deals. Nvidia has invested $23.7 billion in AI firms through 59 deals in 2025 alone, according to PitchBook data, including stakes in OpenAI, CoreWeave and Intel Corp.
The arrangement is considered circular because Nvidia is already a Synopsys customer, purchasing the company's chip design software. Critics have compared such deals to vendor financing schemes that helped fuel the dot-com bubble, questioning whether they artificially inflate the perception of demand for AI infrastructure.
Reuters noted the deal adds to Nvidia's "slew of new partnerships in the artificial intelligence ecosystem amid concerns of increasingly circular deals." Prominent short-sellers including Jim Chanos and Michael Burry have raised questions about what Burry calls "suspicious revenue recognition" related to Nvidia's investments in its own customers.
However, both companies emphasized the partnership is not exclusive, and they will continue to work with the broader semiconductor and electronic design automation ecosystem. Nvidia has defended its investment strategy, arguing it helps diversify dependencies and supports the buildout of critical AI infrastructure.
For Synopsys, the partnership strengthens its position in AI-powered engineering solutions and provides access to Nvidia's global network of thousands of direct sellers and channel partners for joint go-to-market initiatives. The company's market capitalization stood at approximately $77.65 billion as of late November, with analysts maintaining an average price target of $551.
The companies plan to hold a webcast press conference to discuss the announcement, with executives from both firms expected to provide additional details on the strategic rationale and implementation timeline for the expanded collaboration.
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