By Rick Orford
Publication Date: 2026-10-08 09:05:00
Nvidia (NVDA -0.74%) has been making big bets on promising players in the AI race, and one lesser-known partner is starting to catch Wall Street’s attention. Synopsys (SNPS -0.49%) is emerging as one of Nvidia’s key AI partners, giving investors another way to invest in the AI boom beyond Palantir (PLTR +1.07%) and Micron (MU +4.06%). That’s because Synopsys plays a pivotal yet overlooked role in designing the chips powering the AI boom.
How Synopsys powers AI chip design
Synopsys is perhaps one of the biggest under-the-radar beneficiaries of the AI build-out. The company provides the electronic design automation (EDA) software that engineers use to simulate and verify complex chips. That means that as AI requires more complex chips, Synopsys’s tools are becoming increasingly important for getting those designs from concept to production.
Image source: Getty Images.
With that, it’s no surprise that Nvidia has deepened its relationship with the company. The two companies expanded their strategic partnership around AI-powered engineering, spanning agentic AI, simulation, and chip design, with Nvidia investing $2 billion in Synopsys. The collaboration is helping engineers automate complicated design and verification workflows, making chip development more frictionless.
At its September investor day, Synopsys said AI is creating multiple growth engines across its EDA, silicon intellectual property (IP), and engineering businesses, while its longer-term plan targets…
