By Hamza Faisal

A Landmark Deal for Custom Silicon

Amazon Web Services has signed a multi-year agreement worth more than $1 billion to license chip design intellectual property from Synopsys, the two companies announced on Wednesday.
The strategic deal will accelerate the engineering of Amazon's custom chips and AWS cloud infrastructure using Synopsys silicon IP and AI-powered engineering software.
Synopsys is best known for making software that helps companies design complex computer chips, assisting firms such as Nvidia and Intel in laying out tens of billions of transistors on a few square millimeters of silicon.
But the company has increasingly been licensing blueprints for parts of a chip — a business that brought in $1.75 billion in revenue in its most recent fiscal year and where it competes against Arm Holdings.

From Generic Parts to Complex Computing Cores

In its early stages, the Synopsys design licensing business focused on common chip components, where customers found it more cost-effective to license blueprints from Synopsys than to design those parts from scratch.
Over time, the company has moved into more complex designs such as computing cores, and the AWS agreement will focus on blueprints optimized for specific types of chips.
AWS designs a variety of its own chips, including its Graviton central processors and its Trainium AI chips. The two parties did not specify which AWS chips will use Synopsys blueprints.
The agreement marks an expansion of Synopsys' silicon IP business toward application-optimized IP, evolving to a license-plus-royalty model designed to deliver value to both companies as production volumes grow.

Cloud and AI Collaboration Goes Both Ways

The partnership extends beyond chip blueprints. As part of the deal, Synopsys will adopt AWS computing and storage services, as well as Amazon Bedrock, to build and deploy AI applications.
The two companies will also work together to optimize Synopsys software on AWS's Trainium and Graviton platforms.
The agreement underscores how deeply the AI infrastructure race has reshaped the semiconductor industry. Hyperscale cloud providers are racing to reduce dependence on traditional chip suppliers, and licensing specialized chip IP has become a central pillar of that strategy.
For Synopsys, landing AWS as a flagship IP customer validates its push to turn chip blueprints into a royalty-driven growth engine alongside its traditional design software business.