NVIDIA has invested $2 billion in Synopsys, a leading chip design software manufacturer. This investment marks an expansion of their multi-year collaboration, aiming to integrate NVIDIA's AI technology to jointly develop new tools for product design across multiple industries.

According to LSEG data, the deal announced on Monday will make NVIDIA the seventh-largest shareholder in Synopsys. In recent months, NVIDIA has secured a series of AI-related partnerships, fueling concerns about a potential bubble in the sector. This latest investment further extends its collaboration footprint.

As the world’s most valuable company by market capitalization, NVIDIA’s recent deals span multiple areas—from a potential $100 billion investment in OpenAI, the parent company of ChatGPT, to a $5 billion stake in Intel.

On Monday, NVIDIA shares fell over 1%, while Synopsys stock rose 6%.

D.A. Davidson analyst Gil Luria commented, "NVIDIA wields significant influence over who succeeds in the AI-driven computing market, and the company intends to capitalize on that influence."

"By forging a closer partnership with Synopsys, NVIDIA can both accelerate Synopsys’ growth and enhance its credibility while benefiting from Synopsys’ stock appreciation."

**Strengthening Synopsys’ Industry Position**

As a Synopsys customer, NVIDIA purchased approximately 4.8 million shares at $414.79 per share—an 0.8% discount to Synopsys’ closing price last Friday.

Synopsys disclosed in a regulatory filing that the shares issued to NVIDIA were part of a private placement.

Synopsys will leverage NVIDIA’s full suite of developer tools and code libraries to optimize its applications covering chip design, physical verification, and other electronic design automation (EDA) processes.

Prior to this investment, Synopsys noted in September that its intellectual property business was underperforming, attributing the weakness to export restrictions disrupting its China operations and challenges faced by a major foundry customer—widely believed to be Intel.

Monday’s partnership is not exclusive. Synopsys counts AMD among its clients, while NVIDIA maintains ties with Cadence Design, a competitor in the EDA space.

Shares of Cadence Design fell over 1% on the same day.