Executives and directors of semiconductor technology company Synopsys Inc. were hit with a shareholders' derivative suit accusing them of misleading investors about the operational challenges faced by one of its segments following a $35 billion acquisition of an artificial intelligence company made in 2024.

According to the suit filed by shareholder Marc Podems on Tuesday, Synopsys provides software, intellectual property, and other services used to develop semiconductor chips. Its products include electronic design automation, or EDA, tools and pre-designed semiconductor components known as Design IP, the complaint states.

Last September, Synopsys reported its third-quarter financial results and revealed that the IP business "underperformed expectations," which the complaint alleges contradicts representations the company made for several months regarding its prospects.

The suit alleges that at the time of Synopsys' $35 billion acquisition of software company Ansys in 2024, the company touted the "holistic" benefits of the merger, but did not disclose that Synopsys' growing emphasis on artificial intelligence customers was damaging the Design IP business.

When the acquisition occurred, investors were unaware that Synopsys' historical revenue and profit growth as represented in the acquisition documents were artificially inflated by the company's "untenable business practices," the suit alleges.

"[T]he company's growing emphasis on artificial intelligence customers, who require more customization, was weakening the economics of its Design IP business; as a result, certain of the company's road map and resource choices were unlikely to achieve their intended outcomes," the suit states.

The suit's relevant period begins Dec. 4, 2024, the day the company announced its fourth-quarter financial results. It told investors that it had "strong momentum across the business supported by multiple secular growth drivers," and a "resilient business model."

The complaint said the truth came to light Sept. 9, 2025, when Synopsys reported its third-quarter financial results and revealed the IP business "underperformed expectations."

Additionally, Synopsys CEO Sassine Ghazi reported that revenues for the business segment had declined by 8%, and that, as a result, Synopsys would have to pivot its IP resources and road map to "highest-growth opportunities," the suit says.

Following the announcement, shares of Synopsys declined 35%, dropping from $604.37 to $387.78 per share on Sept. 10, 2025, the suit alleges.

In addition to Ghazi, the suit names Synopsys Chief Financial Officer Shelagh Glaser, Chief Accounting Officer Sudhindra Kankanwadi, and several directors as individual defendants and accuses them of breaching their fiduciary duties.

The complaint notes Synopsys is also facing a securities class action based on related claims in the U.S. District Court for the Northern District of California.

Representatives of the parties did not immediately respond to requests for comment on Wednesday.

Podems is represented by Marion C. Passmore, Melissa A. Fortunato, Brandon Walker, and Ligaya T. Hernandez of Bragar Eagel & Squire PC.

Counsel information for Synopsys and the individual defendants was not immediately available on Wednesday.

The case is Podems v. Ghazi et al., case number 5:26-cv-01607, in the U.S. District Court for the Northern District of California.