A need for speed: $35B acquisition could turbocharge global AI race
PITTSBURGH (TNS) —The U.S. is in a sprint against China in a global marathon for artificial intelligence dominance — the notion that the first country to invent and invest in the best computer chips, the biggest data centers and most reliable energy grids will deliver national security and prosperity, and also historic power.
The Trump administration last week released its AI Action Plan, a kind of roadmap to win the race, pushing for the rapid deployment of infrastructure and paring back regulation to make it happen.
The tech industry — and every other industry that relies on it — is feeling the need for speed.
“We never get time back. We have to go faster,” said Anthony Matarazzo, a sales director with Ansys, a Canonsburg-based simulation software firm. “From autonomous vehicles to robotics to data centers to energy, the common denominator is time and intelligence. That’s it.”
Simulation software is a crystal ball into the future, Matarazzo said. And physics is how engineers are grounding AI in reality.
Ansys’ simulations can predict how something like heat or force will impact phenomena on the microscopic level of a computer chip, or a Formula 1 race car.
“As AI infrastructure rapidly expands, simulation is the force multiplier,” Matarazzo said.
Earlier this month, Ansys became part of California-based Synopsys, a company that uses software to design computer chips — specifically, silicon design chips.
Between the time that the $35 billion acquisition was first announced in January 2024 and when it was sealed, conversations about AI advanced from how companies can harness this technology to how countries can use it to lock in their dominance and values.
That could explain why Chinese antitrust regulators who usually don’t get involved in mergers of foreign companies that have a small market share in China — Synopsys and Ansys had 10% and 5% of their sales respectively coming from the country last year — took up a review of the deal and were the last to approve it, in mid-July.
Access to AI-enabling technology, from chips to software, has become a hot issue in trade negotiations.
The Trump administration recently reversed previous restrictions on California-based Nvidia, the market leader in chip manufacturing, selling chips to China.
That company’s cofounder and CEO Jensen Huang convinced the president that China is a huge market — anticipating up to $15 billion in H20 chip sales this year — and that selling a less powerful chip there is beneficial to the U.S.
Nvidia has used Ansys technology to refine its chip design; Ansys, in turn, has incorporated Nvidia’s technology to accelerate its own simulations.
“We’re at a point now where we’re about to simulate environments at a million times higher performance than something we were able to do 10 years ago,” Huang is quoted as saying on the Ansys website. “A million times. Cars haven’t improved by a million times. Nothing’s improved by a million times.”
China is also working to get into the chip business, said Larry Pileggi, a Carnegie Mellon University professor of electrical and computer engineering, who started making chips in the 1980s.
“The U.S. right now is hanging on the fact that we’re entrepreneurial, we have these [electronic design automation] companies [that are] the best in the world, and that puts us at the forefront of technology,” Pileggi said.
Synopsys is one of those companies, he said.
Clients come to it with a set of functions they would like their chip to perform, and Synopsys builds the chip’s software and hardware design to match those intended purposes.
In that way, the chip’s function determines its form. But that form is also shaped by environmental factors — like the temperature at which this chip will operate or how it will interact with other chips in the final product.
That’s where simulation comes in.
“We can help automotive engineers design, optimize, and virtualize cars’ features and functions — from chips to chassis — all in software and before the start of production,” Sassine Ghazi, president of Synopsys, wrote in a blog post announcing the merger.
“Imagine in the future knowing an EV’s exact range in subzero temps without a real-world test, or knowing exactly how safety features perform without ever crashing a real car.”
An engineer against AI
Like AI, Ansys has been around for decades.
The company that ended last year with $2.5 billion in revenue and 6,800 employees globally — more than 1,000 in the Pittsburgh area — began in a Pennsylvania farmhouse in 1970.
John Swanson, a University of Pittsburgh alum and former engineer in Westinghouse’s Astronuclear Laboratory, founded Swanson Analysis Systems, which was later renamed Ansys, after its simulation software.
“I was designing software for the engineers to develop good products,” Swanson, who now lives in North Carolina, recalled last week.
Today, though, if you handed him the Ansys code, he said he wouldn’t know how to run it. A lot has changed since he sold the company in the 1990s.
Even then, Ansys was able to simulate “anything that was real, that you could feel and touch. And then we got into magnetics and electrical circuits. And that you can’t feel and touch.”
“But then when you’re getting the chip design,” Swanson said, “then it’s all beyond me.”
Over the years, Ansys has been involved in some high-profile challenges. Its software figured out how to fold a mirror the size of a tennis court inside a rocket that launched the James Webb Space Telescope that now orbits the Earth.
Oracle-Red Bull’s Formula 1 racing team worked with Ansys to hone its aerodynamics on cars that rip 200 miles per hour around a track. Its modeling also helps doctors simulate 3D models of patients’ hearts and eyes to help surgeons plan for surgery.
Swanson — the farm boy-turned-founder, then renewable energy engineer, and now philanthropist — said he is “not very enthused about AI.”
“AI is a power hog,” he said, “and it’s basically turning back everything we’ve tried to achieve.”
Swanson, who devoted his engineering passion to solar energy after leaving Ansys, said he’s “depressed” to see the work that he poured into propagating renewable energy may be reversed by the AI revolution’s hunger for power.
These are the issues that he and his buddies discuss at “nachos club” when Swanson comes back to Pittsburgh a couple of times a year — the state of the world over some drinks (so as to forget in the morning, he said).
Swanson joked that, at 85, he doesn’t have to stick around to stand by any of his predictions.
“One of the reasons my business was so successful was the engineers told us what they needed. We did it,” Swanson said. “We did not try to push the market. The market pulled us.”
‘The Wild West’
What’s happening in the tech space is unlike anything Matarazzo has seen in the past 10 years.
“Everything’s changing so fast, industries are blending together,” he said. “It is literally the Wild West.”
That sentiment is apparently widely held: Matarazzo said that at the executive dinner after Sen. Dave McCormick’s recent Energy and Innovation Summit that industry giants and Trump attended, cowboy hats were handed out, and worn.
“We ended it by having these high-profile figures in a room just talking about the success about to come, and they all had cowboy hats on,” he said.
The AI economy, with its expected demand on infrastructure and energy, is also “an unprecedented, multi-scale optimization challenge — energy to compute, cooling to control.”
Data centers with the computing power necessary for AI’s generative demands get hot. Hundreds of chips and computers warm up when bouncing data between nodes and networks, so air and water cooling technologies to keep them from overheating are a priority for the centers. Stable, abundant access to electricity from the grid is similarly crucial.
Small improvements in Synopsys’s silicon design for semiconductors (where silicon acts as the crucial insulator or conductor, in the chip’s circuit) could potentially lead to data centers getting smaller and more energy efficient, Synopsys’s Ghazi wrote in his blog post.
On July 21, inside the company’s Canonsburg headquarters, former Ansys CEO Ajei Gopal presented Ghazi with the “key” to Ansys — a comically big, black-and-yellow prop stamped with the Ansys logo that said: “Congratulations Sassine! You have the wheel! — Ajei.”
The longtime Pittsburgh company, which is no longer public, said it will retain its office and employees in this area.