The deal makes Nvidia the seventh-largest shareholder in Synopsys, according to LSEG data, adding to the company’s growing portfolio of AI-related investments. In recent months, Nvidia has made headlines with stakes ranging from as much as $100 billion in OpenAI, the parent company of ChatGPT, to a $5 billion investment in Intel, fueling discussions about a potential AI investment bubble.
Analyst Gil Luria of D.A. Davidson said, “Nvidia has substantial control of who wins in the AI-driven compute marketplace and it would like to benefit from that impact. By partnering more closely with Synopsys it contributes momentum and credibility, and in turn will benefit from the appreciation of Synopsys shares.”
Under the deal, Nvidia purchased roughly 4.8 million Synopsys shares at $414.79 apiece through a private placement, representing a slight discount of 0.8% to the stock’s closing price on Friday. Synopsys plans to leverage Nvidia’s suite of developer tools and code libraries across applications including chip design, physical verification, and other electronic design automation (EDA) processes.
The investment follows a challenging period for Synopsys’ intellectual property business, which experienced disruptions from export restrictions affecting China and difficulties at a major foundry customer, widely believed to be Intel.
The collaboration is not exclusive: Synopsys also counts AMD as a customer, and Nvidia continues to work with Cadence Design, a rival EDA firm. Cadence shares fell more than 1% following the announcement, while Synopsys rose 6% and Nvidia’s stock dipped just over 1%.