• Amazon will expand its use of Synopsys electronic design automation, simulation and analysis technologies.
• The companies plan additional work involving Amazon’s Trainium and Graviton processors.
• Synopsys and Amazon will also develop custom agentic AI capabilities for Amazon’s engineering teams.

Synopsys Inc. (SNPS) is expanding its silicon intellectual property business into application-optimized designs, with Amazon.com Inc. (AMZN) becoming the lead customer under a new multi-year agreement.

The deal broadens a 15-year relationship and increases Amazon’s use of Synopsys technology as the cloud provider builds its own processors for general computing and artificial intelligence (AI) workloads.

Silicon intellectual property (IP) refers to reusable components of a chip design. Under the agreement, Amazon will expand its use of Synopsys IP to include designs optimized for particular applications rather than relying only on more general-purpose building blocks.

At the time of this writing, SNPS stock traded nearly 3% higher, and AMZN stock was also marginally up.

Amazon Deepens Its Custom-Chip Work

Amazon already develops a range of purpose-built processors for Amazon Web Services. Its Graviton family handles general-purpose computing, while Trainium is designed for AI training and inference. 

Amazon also uses its Nitro system to move functions such as networking, storage and security away from the main processor and onto dedicated hardware.

AWS launched instances based on its fifth-generation Graviton5 processor this year, continuing a custom-silicon program that began with the first Graviton chip in 2018.

The new Synopsys agreement extends beyond the underlying chip IP. Amazon will increase its use of Synopsys electronic design automation (EDA) tools, as well as simulation and analysis technologies. These tools are used to design chips and test how they are expected to behave before manufacturing.

AI Moves Into The Engineering Process

Synopsys and Amazon also plan to work on multiphysics solutions for Trainium and Graviton. That involves analyzing how factors such as heat, power, and mechanical effects interact inside increasingly complex chips and systems.

The companies will also apply AI across what Synopsys calls “silicon-to-system” engineering workflows, including developing custom agentic AI capabilities for Amazon engineers.

Those tools are intended to assist with designing, analyzing, optimizing, and validating chips and systems.

Retail Sentiment Around SNPS, AMZN Stock

On Stocktwits, retail investor sentiment surrounding SNPS stock and AMZN stock remained ‘bearish’.

So far this year, Synopsys stock has fallen more than 11%, while Amazon stock has risen over 9%. In comparison, the Invesco QQQ Trust, Series 1 ETF (QQQ), which holds both stocks, has risen over 21% during this period.

See Also: Barclays’ Alexander Altmann Says High Real Rates Are ‘The Brakes’ On Equity Valuations, Warns Market Is ‘Not Out Of The Woods’

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