Chip-making giant Nvidia Corp. has announced a significant $2 billion investment in Synopsys Inc., a leading chip-design software company, as part of an expanded engineering and design partnership. This substantial investment, which saw Nvidia purchase shares at $414.79 each, gives the chipmaker a 2.6% stake in Synopsys.

The strategic collaboration aims to integrate Nvidia’s strengths in AI and accelerated computing with Synopsys’ advanced engineering solutions. This synergy is designed to empower research and development teams to design, simulate, and verify intelligent products with greater accuracy, speed, and cost-effectiveness. Synopsys, based in California, is recognized as one of the largest providers of software and services critical for designing complex electronic components, including those essential for artificial intelligence systems.

Jensen Huang, founder and CEO of Nvidia, emphasized the transformative potential of the alliance, stating that the partnership would “harness the power of Nvidia accelerated computing and AI to reimagine engineering and design, empowering engineers to invent the extraordinary products that will shape our future.” Concurring with this vision, Sassine Ghazi, CEO of Synopsys, highlighted the growing complexity of developing next-generation intelligent systems. Ghazi noted that the partnership between Synopsys and Nvidia is uniquely positioned to deliver AI-powered, holistic system design solutions, enabling innovators to realize their creations more efficiently.

This investment is part of Nvidia’s broader strategy of investing in key firms amidst the artificial intelligence surge. The company has previously made investments in entities like OpenAI and data center operators such as CoreWeave Inc. Notably, Nvidia also committed $5 billion to Intel Corp. to co-develop chips for personal computers and data centers, showcasing its expansive collaborative approach within the industry.

Synopsys specializes in software that facilitates the intricate design of billions of transistors and connectors for modern chips. Its technology also verifies the intended functionality of hardware before production, a crucial step for developing high-performance chips like those sold by Nvidia. According to Bloomberg Intelligence analyst Niraj Patel, Synopsys’ technology is widely adopted by numerous semiconductor and systems firms, including major players like Alphabet Inc. and Tesla Inc. This partnership is expected to enable Synopsys to incorporate more advanced chips into its own design and simulation tools, benefiting diverse sectors such as automotive, aerospace, industrial, and energy.