TLDR Amazon signed a Synopsys chip design agreement worth over $1 billion, combining licensing fees with production royalties. Synopsys will use AWS computing, storage, and Amazon Bedrock to
Amazon announced a chip design agreement exceeding $1 billion with Synopsys on September 30. The deal adds another infrastructure commitment for AMZN stock investors to assess as Amazon Web Services (AWS) expands its artificial intelligence services.
The agreement runs for several years and combines licensing fees with royalties tied to production. Amazon will serve as Synopsys’ lead customer for chip technology tailored to specific computing tasks. The companies have worked together for more than 15 years.
AWS already develops Graviton processors for general computing and Trainium chips for training and running AI models. Its Nitro chips manage cloud security, networking, and storage. Amazon says custom chips help improve performance and lower computing costs.
Separately, Synopsys announced its OpenAI chip design partnership on September 30. The companies plan to develop GPT-Synopsys, an AI model that operates engineering software and helps teams test chip designs. Their agreement also includes shared revenue and joint sales efforts.
Synopsys will also use Amazon’s computing and storage services to develop its products. It plans to build AI applications with Amazon Bedrock, while both companies adapt engineering software for Graviton and Trainium.
Amazon’s second-quarter results provide the latest earnings context for AMZN stock. AWS sales rose 37% to $42.2 billion. The division’s operating income increased to $16.6 billion from $10.2 billion a year earlier.
Other cloud providers also continue buying AI hardware. Vultr placed a $1.2 billion order with HPE on September 30 for AMD Helios systems. It plans to install the equipment at U.S. data centers.
Amazon raised its 2026 capital spending forecast to $220 billion in July, up from $200 billion. CEO Andy Jassy cited higher memory chip costs as the main reason for the increase. The budget also covers robotics, semiconductors, and satellite projects.
Amazon also signed a 20-year nuclear power agreement with Constellation Energy. The contract covers 690 megawatts from Maryland’s Calvert Cliffs plant, including 190 megawatts of planned additional capacity. Constellation expects the additional capacity to begin operating between 2030 and 2032.
Amazon reported negative free cash flow of $7.6 billion for the 12 months through June. It recorded positive free cash flow of $18.2 billion in the previous comparable period. The company attributed the decline mainly to higher spending on property and equipment.
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