"Nvidia Corp. has struck a deal to invest $2 billion into chip-design software maker Synopsys Inc.'s stock as part of a broader engineering and design tie-up, the latest massive investment by the chipmaker into one of its own suppliers. Nvidia purchased the shares at $414.79 each, the companies said in a statement on Monday, compared with a closing price of $418.01 on Friday. The stake represents 2.6% of Synopsys' outstanding shares. The Sunnyvale-based company is one of the largest providers of software and services used to design electronic components."
"Those investments have raised concerns of circular deals that prop up the valuations of certain companies and put money into the hands of customers, who in turn buy chips from Nvidia. Synopsys' software aids with designing the complex layout of billions of transistors and connectors for modern chips, and also verifies that the hardware will work as intended before the production stage. That process is integral to creating chips central to artificial intelligence systems, such as those sold by Nvidia."
Nvidia bought $2 billion of Synopsys shares at $414.79 per share, acquiring a 2.6% stake in the chip-design software provider. Synopsys supplies software and services for designing complex chip layouts and verifying hardware before production, capabilities vital for AI-focused chips. The partnership will integrate Nvidia's tools into Synopsys' design applications, deploy AI agents, and include joint engineering and marketing activities. Synopsys’ technology serves many semiconductor and systems companies. Nvidia's broader investment strategy includes stakes in AI-related firms and infrastructure, prompting concerns about circular financing that could bolster valuations and channel funds to customers.
Read at www.mercurynews.com
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