Core Viewpoint - The article discusses the declining relevance of the Design Automation Conference (DAC) in the EDA industry, highlighting a "funding gap" and the challenges faced by both established and startup EDA companies in maintaining innovation and market presence [1][4]. Group 1: DAC's Evolution and Current State - DAC has shrunk significantly, now only filling the Moscone West venue, a stark contrast to its previous expansive presence [1]. - The reduction in attendance is attributed to budget cuts, with companies sending fewer engineers to the conference, leading to less need for large exhibition spaces [1][2]. - EDA companies are increasingly opting for exclusive technical days, questioning the cost-benefit ratio of participating in DAC [2]. Group 2: Challenges for EDA Companies - Large EDA companies face high customer acquisition costs, with sales costs accounting for about 25% of total costs, despite recent reductions [2]. - Startups struggle with market entry due to lack of resources and the challenge of selling disruptive technologies that may disrupt existing processes [3][4]. - The cycle for startups to penetrate the market is lengthening, increasing costs and risks, which in turn makes venture capitalists more cautious [3]. Group 3: Implications for Innovation - The decline in startup success rates could lead to a reduction in the number of individuals engaged in EDA research, stifling innovation [3][4]. - Large EDA firms may end up paying higher premiums for acquisitions of successful startups, as they shift their investment focus from sales and marketing to engineering acquisitions [5]. - The article suggests that a healthy industry requires a balance of innovation from both large companies and startups, with universities playing a crucial role in generating new ideas [5].