Nvidia is putting $2 billion into Synopsys to rebuild the software that designs chips around its own AI tools. The companies say the deal could cut simulation time by up to 30x and verification time by up to 50x, while Synopsys keeps stacking similar AI partnerships with TSMC, OpenAI and Amazon.
Nvidia builds the chips that train AI models. Now it's betting on AI to help build the next generation of chips. The company announced a strategic multiyear partnership with Synopsys on December 1, 2025, backed by a $2 billion investment in Synopsys common stock at $414.79 per share, aimed at rewiring the electronic design automation (EDA) software engineers use to plan, simulate and verify chips before they reach a fab.
Faster simulation, faster verification
The deal folds three Nvidia strengths into Synopsys's software: high-performance computing, agentic AI, and digital twin technology, running on Nvidia's CUDA stack alongside tools such as NIM and the NeMo Toolkit. The companies say circuit simulation is projected to run up to 30x faster on Nvidia's Grace Blackwell platforms. Synopsys AgentEngineer, integrated with Nvidia technology, can deliver up to 50x faster verification signoff, along with 20-30% productivity gains.
Nvidia has relied on Synopsys tools to design its own chips for more than three decades, but the equity stake turns a longtime customer into a shareholder. Synopsys has signaled the arrangement isn't exclusive and remains open to working with other semiconductor firms.
Synopsys builds out its AI network
The Nvidia tie-up isn't an isolated move. Synopsys and Taiwan Semiconductor Manufacturing expanded their collaboration so chip designers can use Synopsys's tools to design and validate chips on TSMC's upcoming A14 manufacturing process. Synopsys also announced a deal with OpenAI to develop GPT-Synopsys, a specialized AI model for chip design, and struck a multi-year agreement with Amazon to supply silicon IP and AI engineering tools for its custom chips.
Nvidia's own growth math
The deal lands as Nvidia keeps expanding on its core business. Nvidia's annual revenue has climbed 700% over the past five years, reaching $215 billion in the last fiscal year, and the company now expects 70% growth in the next fiscal year. Yet data center revenue made up 92% of Nvidia's total revenue in its most recent quarter, leaving the company exposed if AI infrastructure spending slows. For Nvidia, faster EDA tools running on its own GPUs create another source of demand for those GPUs, making every chip designer who adopts the workflow a customer twice over.
Sources: Crypto Briefing, The Motley Fool, The Motley Fool
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