Semiconductor software giant Cadence Design Systems agreed to acquire ChipStack, a Seattle-based startup developing AI tools to speed up chip verification and design.

ChipStack emerged from Seattle’s AI2 Incubator in 2023 and raised more than $7 million. The startup built AI-powered agents that automate chip verification — traditionally one of the most time-intensive steps in semiconductor design.

The entire 20-person team is joining San Jose, Calif.-based Cadence, which said the acquisition will strengthen its AI-driven verification capabilities. Cadence and ChipStack previously partnered on various integrations.

Financial details were not disclosed, but investors saw a strong return on the deal, according to a spokesperson for ChipStack. The company’s investors include AI2 Incubator, Khosla Ventures, Cerberus Capital Management, Clear Ventures, and other angels.

ChipStack CEO and co-founder Kartik Hegde earned his PhD in computer science from University of Illinois in 2022 and had internships at Meta and NVIDIA. He founded ChipStack wtih CTO Hamid Shojaei, who previously worked at Lightmatter, Google, and Qualcomm.

“As ChipStack’s product adoption has grown, so has our ambition and vision,” Hedge wrote on LinkedIn. “When the opportunity came to join Cadence, it was clear to us that this is the best way to take our product to a wider audience, while expanding the feature set even faster.”

Jacob Colker, managing director at AI2 Incubator, described the founders as “elite AI talent building the next wave of companies — deep technical expertise meeting real-world impact.”

“They’ve built agentic AI that solves one of chip design’s biggest bottlenecks, accelerating verification by 70%,” he said in a statement. “This is exactly the kind of applied AI innovation that defines this new era of entrepreneurship.”