AWS Signs $1B+ Chip Design IP Licensing Deal With Synopsys

Amazon Web Services said Wednesday it will license chip design intellectual property from Synopsys (Nasdaq: SNPS) under a multi-year agreement valued at more than $1 billion, naming Amazon the lead customer for Synopsys' silicon IP business. The deal shifts Synopsys toward a license-plus-royalty model, with royalties tied to production volumes, and expands Amazon's use of Synopsys electronic design automation, simulation and analysis tools, and agentic AI. Synopsys will move to AWS cloud infrastructure and use Amazon Bedrock for AI applications. AWS designs Graviton processors, Trainium AI chips, and Nitro chips for cloud security, networking, and storage; the companies did not specify which chips will use Synopsys blueprints. Synopsys' IP licensing business generated $1.75 billion in its most recent fiscal year, Reuters reported. Amazon has expanded custom silicon efforts, including a September Qualcomm partnership and CEO Andy Jassy's proposal to sell chip racks externally, with annualized chip revenue of roughly $20 billion.