Shares of Arteris, Inc. (AIP) are skyrocketing in Tuesday's pre-market trading session, surging by an impressive 40.63% following a significant announcement. The semiconductor system IP provider has revealed a strategic partnership with Advanced Micro Devices (AMD) that has caught investors' attention and sparked a bullish sentiment towards the stock.

The surge comes after Arteris disclosed that AMD has licensed its FlexGen network-on-chip (NoC) interconnect IP for next-generation AI chiplet designs. This collaboration aims to integrate Arteris' FlexGen NoC IP technology with AMD's Infinity Fabric interconnect, enhancing data transport capabilities in AMD chiplets powering AI applications across various platforms, including data centers, edge computing, and end devices.

Investors are clearly optimistic about the potential impact of this partnership on Arteris' future growth and market position. The deal not only validates Arteris' technology but also positions the company to play a crucial role in AMD's broad AI computing portfolio. As the demand for efficient and high-performance AI chips continues to grow, Arteris' specialized interconnect technology could become increasingly valuable in the semiconductor industry.