By Stephen Nellis and Arsheeya Bajwa
Dec 1 (Reuters) – Nvidia has invested $2 billion in chip design software maker Synopsys as part of an expanded multi-year tie-up to jointly develop new tools for designing products across industries using its AI technology.
The deal, unveiled by the companies on Monday, comes as Nvidia has carried out a range of investments, such as those in OpenAI and Anthropic, to try to cement its dominance in the artificial intelligence market.
The Synopsys deal is about shifting the work of several high-tech industries that are just starting to adopt AI away from central processing units used in the past and toward the graphics processing unit chips sold by Nvidia.
Synopsys software is widely used in designing everything from computer chips to jet engines. Engineers use its tools to simulate those designs virtually in computers before committing to expensive prototype manufacturing.
Those simulations can take weeks, but could be sped up to a few hours using Nvidia’s chips, the CEOs of the two companies said during a press conference.
“The order of magnitude speed-up is going to unlock opportunities that have never been possible before,” Nvidia CEO Jensen Huang said in announcing the deal.
Synopsys and Nvidia are customers of one another. Nvidia’s flurry of investments has raised concerns that it is paying customers to buy its chips.
DEAL IS NON-EXCLUSIVE
Synopsys CEO Sassine Ghazi said the Nvidia cash will give Synopsys “optionality” as it adapts its software for Nvidia chips.
“There is no intention or commitment to use that $2 billion to purchase Nvidia GPUs,” Ghazi said during the press conference. “This is something that we do on a normal course of business.”
Both CEOs said the deal is non-exclusive, and Ghazi said Synopsys is open to working with other chipmakers.
“If an AMD or an Intel or whichever customer wanting to capture a similar opportunity (approaches Synopsys), it’s not exclusive. We’re willing and happy to work with them,” Ghazi said.
Synopsys shares were up nearly 5%, while Nvidia was up 1.4%.
The world’s most valuable company has invested billions of dollars this year in companies linked to the booming AI industry, ranging from deals allowing as much as a $100 billion investment in ChatGPT parent OpenAI to a $5 billion stake in Intel.
Nvidia bought Synopsys’s common stock at $414.79 per share, the companies said on Monday, representing a discount of about 0.8% to the stock’s last closing price on Friday.
Synopsys also counts AMD as a customer, while Nvidia works with the electronic design automation firm’s rival Cadence Design.
Shares of Cadence, which unveiled its own partnerships with Nvidia earlier this year, were about flat.
(Reporting by Stephen Nellis in San Francisco and Arsheeya Bajwa in Bengaluru; Editing by Shinjini Ganguli, Ani D’Silva and Bill Berkrot)
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