Amazon Signs $1 Billion Synopsys Deal as AWS Steps Up Nvidia Challenge

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Amazon.com Inc. (NASDAQ:AMZN) announced a multi-year deal worth more than $1 billion with Synopsys Inc. (NASDAQ:SNPS) Wednesday, expanding the chip-design technology behind AWS’s custom silicon push as it builds alternatives to processors from Nvidia Corp. (NASDAQ:NVDA).

Amazon will become the lead customer for Synopsys’ new application-optimized silicon IP business, essentially reusable chip designs tailored to specific workloads.

The agreement also expands Amazon’s use of Synopsys software to design, simulate and test increasingly complex chips.

Synopsys and Amazon will tailor the software for Amazon’s Trainium AI chips and Graviton processors.

Why It Matters

Amazon has increasingly pitched custom chips as a way to improve the economics of AI computing.

“From Graviton to Trainium, purpose-built chips…