Qualcomm acquires AI chip startup Modular for $4 billion to challenge Nvidia's dominance

Qualcomm Buys Buzzy Chip Startup Modular for Nearly $4 Billion

Qualcomm will acquire the Silicon Valley chip startup Modular for nearly $4 billion. The companies announced the acquisition on Wednesday; Qualcomm said it expects to issue up to 19.2 million shares of commons stock in the deal, which works out to just under $4 billion based on the company's last closing share price. The deal, which includes $300 million for Modular employees, comes nine months after the chip startup raised $250 million at a $1.6 billion valuation. It's expected to close in the second half of this year. Modular makes and sells a chip software platform. It also produces a proprietary coding language that allows developers to write AI software to run on different chips without having to rewrite the code for each chip. The startup's entire team, which includes its two cofounders and around 150 employees, are expected to join Qualcomm. Modular will remain a standalone entity for the foreseeable future, with headquarters in Los Altos, California. "We believe the future belongs to developer-friendly, horizontal platforms that can run across diverse compute environments and give customers real choice in how and where they deploy AI," said Qualcomm president and CEO Cristiano Amon in a statement. The deal signals Qualcomm's growing ambitions to expand beyond chips for the mobile device market, which generate the vast majority of the company's revenues. Amon recently said the company has been working on 40 different chip designs for AI gadgets, including smart glasses, jewelry, earbuds, pins, and watches. But Qualcomm has also been making a big push into the data center market, which requires more powerful chips. Late last year, the company acquired Ventana Micro Systems, a startup focused on building server CPUs based on RISC-V, an open-standard chip architecture. It's also working on custom ASIC designs, or application-specific integrated circuits, for data centers, with China's ByteDance reported to be an early customer. Modular was founded in 2022 by Chris Lattner and Tim Davis.Both worked on Google's TPU chips before leaving to launch their own company. Lattner's career prior to Google is a storied one: He built the open source compiler infrastructure project LLVM, as well as Apple's Swift programming language. Lattner was also briefly the head of Tesla's Autopilot software program. (Famed AI researcher Andrej Karpathy, who recently joined Anthropic, later took that role.) Lattner and Davis wanted to create a unifying software layer that helps cloud businesses squeeze as much juice as possible out of GPUs and CPUs, Lattner told WIRED in a profile published last year. In doing so, Modular challenged Nvidia's CUDA, a closed software system for GPUs, and AMD's ROCm, which is open-source but not always easy to port to other chips. This put Modular in a tricky position: It eventually secured partnerships with those big chipmakers, as well as with hyperscalers like Amazon and even with Apple, while simultaneously competing with them and the software they developed in-house. At the time, Lattner said he believed that he and Davis were tackling a software problem that had to be solved outside of a Big Tech environment, because it was "structural." Ultimately, the structure of Qualcomm won out.

Qualcomm nearing deal for AI chip startup Modular, Bloomberg News reports

June 22 (Reuters) - Qualcomm (QCOM.O), opens new tab is in advanced discussions to acquire Modular Inc in a transaction valuing the AI chip company at about $4 billion, Bloomberg News reported on Monday, citing people familiar with the matter. If completed, the deal would mark a significant step-up from the $1.6 billion valuation Modular secured in a funding ⁠round just nine months ago. A global supplier of smartphone chips, Qualcomm has been working to reduce its reliance on the volatile handset market by branching out into fast-growing areas like data center processors and autonomous vehicle chips. Here are a few details: Reporting by Juby Babu in Mexico City; Editing by Vijay Kishore Our Standards: The Thomson Reuters Trust Principles., opens new tab

Qualcomm inks deal for AI startup Modular to bolster software stack, data center buildout

Qualcomm on Wednesday said it's buying infrastructure startup Modular to boost its artificial intelligence software capabilities amid the data center buildout. The deal will better position Qualcomm in the inference market and help companies run AI more efficiently. "We believe the future belongs to developer-friendly, horizontal platforms that can run across diverse compute environments and give customers real choice in how and where they deploy AI," said Qualcomm CEO Cristiano Amon in a release. The deal is expected to close in the second half of 2026. Qualcomm didn't provide the financials of the deal. Bloomberg reported early this week that Qualcomm and Modular were in advanced talks for a deal valued at nearly $4 billion. Reuters calculations valued the acquisition at $3.92 billion. Businesses are on the hunt for ways to optimize AI use as token costs skyrocket, hampering enterprise budgets. At the same time, Qualcomm is looking to expand its position in the data center market as AI's skyrocketing growth spikes demand for infrastructure capable of processing large swaths of data. The company is holding an investor day on Wednesday.

Qualcomm shares jump 14% on Modular acquisition, guidance upgrade

Qualcomm shares jump 14% on Modular acquisition, guidance upgrade Qualcomm Inc.'s stock jumped 14% in after-hours trading today after it shared a series of updates about its artificial intelligence roadmap. The company announced plans to acquire an inference software startup called Modular Inc. and previewed two upcoming AI chips. Additionally, Qualcomm significantly raised its fiscal 2029 guidance. The chipmaker now expects its non-handset revenue segment, which includes its data center business, to reach $40 billion. The company announced most of the updates during an investor event in New York. Qualcomm plans to finance the Modular acquisition with 19.2 million shares, which are worth $3.92 billion at the chipmaker's last unaffected closing price. That sum is more than double the valuation Modular received after its most recent funding round. The company has raised $380 million from Alphabet Inc.'s GV, Greylock and others. Porting an AI model from one chip to another historically required developers to make extensive code modifications. Modular has built a software platform that automates the task. Qualcomm, which offers a growing lineup of AI chips, might be looking to use the technology to ease the task of porting AI models to its silicon. Making it easier for customers to switch from Nvidia Corp. accelerators could help the company boost product adoption. Modular's software also automates several related tasks. It includes AI building blocks that remove the need for engineers to write everything from scratch, which speeds up development. Software teams that don't require a fully custom AI model have access to several hundred pre-packaged neural networks. "As agentic AI scales across data centers and edge environments, the industry is moving toward disaggregated, multi-vendor architectures that demand a more open and modern software foundation," said Qualcomm Chief Executive Officer Cristiano Amon. At the company's investor event today, Amon debuted two new data center chips called the Dragonfly C1000 and Dragonfly AI300. The C1000 is a central processing unit designed to power servers that run AI workloads. The AI300, in turn, is a machine learning accelerator compatible with both air- and liquid-cooled racks. Qualcomm shared few details about the AI300's architecture. It did, however, specify that the chip is expected to provide significantly higher performance per watt than existing AI accelerators. The company shared a more detailed overview of the C1000, which it says will include more than 250 cores with top speeds in excess of 5 GHz. Qualcomm says that the CPU will provide double the performance per watt of existing processors with comparable features. Additionally, the chip is expected to make AI clusters more cost-efficient. That value proposition has won over Meta Platforms Inc., which plans to implement the C1000 in its servers. The Facebook parent is adopting the chip through a CPU supply agreement the companies describe as a "multi-year, multi-generation" contract. The wording suggests Meta will also buy the next-generation processors that Qualcomm plans to launch after the C1000. The financial terms of the deal were not disclosed. The Meta contract may be one of the reasons Qualcomm raised its sales forecast. The company stated today that its non-handset revenue segment will reach $40 billion in fiscal 2029, a $18 billion increase over its previous guidance. Qualcomm also boosted its adjusted earnings forecast to $18 per share, which is well ahead of the $15.26 predicted by analysts.

Qualcomm to buy AI startup Modular for $4 billion in AI software push

Qualcomm is acquiring AI startup Modular for nearly $4 billion in an all-stock deal. This move aims to enhance Qualcomm's software capabilities for running AI models across various chips without custom coding, directly challenging Nvidia's dominant CUDA platform. The acquisition is part of Qualcomm's strategy to expand its presence in the booming data-center market and reduce its dependence on smartphone chip sales. Qualcomm said on Wednesday it would buy AI startup Modular in an all-stock deal valued at nearly $4 billion, gaining access to software that runs AI models across chips without having to write code for each processor. Buying Modular pits Qualcomm against CUDA, the software platform that has helped underpin Nvidia's AI dominance by tying millions ⁠of ⁠developers to the $5 trillion company's chips. As part of the deal, Qualcomm expects to issue up to 19.2 million shares of its common stock to Modular's equity holders. The transaction is valued at $3.92 billion, according to a Reuters calculation based on Qualcomm's last closing price. Qualcomm has been seeking a larger foothold in the data-center market as demand for generative AI surges, ⁠and is already targeting the market with processors for data centers and other AI chips with shipments planned by the end of ⁠the year. Modular's software is primarily used to run, or "infer", AI models, a market that has emerged as the latest battleground for chipmakers as Nvidia looks to ward off competitors that are selling custom chips developed for in-house use. The startup has positioned itself as a neutral software layer for AI computing, supporting chips from Nvidia, AMD and other vendors. "We believe the future belongs to developer-friendly, horizontal platforms that can run across diverse compute environments and give customers real choice in how and where they deploy AI," Qualcomm CEO Cristiano ⁠Amon said. The deal, expected to close in the second half of this year, comes as Qualcomm pushes deeper into AI and data-center markets to reduce its reliance on smartphone chips, which generate the bulk of its revenue. As part of its efforts to branch out, the smartphone chipmaker is also in talks to buy AI chip startup Tenstorrent for $8 billion to $10 billion, The Information reported last week.

Qualcomm's Next AI bet? Reportedly Eyes A $4 Billion Deal For Startup Modular - Qualcomm (NASDAQ:QCOM)

Qualcomm Inc (NASDAQ:QCOM) is in advanced discussions to acquire Modular Inc in a transaction that could value the artificial intelligence company at about $4 billion, Reuters News reported Monday. Qualcomm expands AI exposure An announcement is expected in the coming weeks, the report added, citing Bloomberg. Modular raised $250 million in a funding round in September that valued the company at $1.6 billion. Qualcomm and Modular did not immediately respond to Benzinga's request for comment. What is Modular? Founded in 2022 by Chris Lattner and Tim Davis, who met at Google, Modular was formed as they were "frustrated by AI's fragmented infrastructure", according to the company's website. The company develops software infrastructure that helps companies build and deploy AI applications across different hardware and cloud platforms through a unified framework. Qualcomm wants more AI The reports on the acquisition come days after The Information reported that Qualcomm was in talks to acquire AI chip startup Tenstorrent for $8 billion to $10 billion, a deal that would expand the company's AI chipmaking capacity. Price Action: Shares of QCOM closed 1.86% lower on Monday at $221.90, and fell further 0.72% in after-hours trading. Benzinga edge rankings indicate QCOM has a Momentum score in the 89th percentile and Growth score in the 43rd percentile. Photo Courtesy: Kemarrravv13 on Shutterstock.com Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

AI chip startup: Qualcomm nearing deal for AI chip startup Modular: report

A global supplier of smartphone chips, Qualcomm has been working to reduce its reliance on the ⁠volatile handset market by branching out into fast-growing areas like data center processors ⁠and autonomous vehicle chips. Qualcomm is in advanced discussions to acquire Modular Inc in a transaction valuing the AI chip company at about $4 billion, Bloomberg News reported on Monday, citing people familiar with the matter. If completed, ⁠the ⁠deal would mark a significant step-up from the $1.6 billion valuation Modular secured in a funding round just nine months ago. A global supplier of smartphone chips, Qualcomm has been working to reduce its reliance on the ⁠volatile handset market by branching out into fast-growing areas like data center processors ⁠and autonomous vehicle chips. Here are a few details: A deal could be announced in the coming weeks, though talks could still fall through or the details could change, Bloomberg said. Qualcomm did not immediately respond when contacted by Reuters, while Modular could not be reached for comment. Founded in 2022, Modular has raised a ⁠total of $380 million to date, including a $250 million in a funding round in September. In a separate deal, Qualcomm is in talks to acquire AI chip startup Tenstorrent for $8 billion to $10 billion, The Information reported last week.

Qualcomm to acquire AI software company Modular By Investing.com

NEW YORK - Qualcomm Incorporated (NASDAQ:QCOM) announced today it has reached an agreement to acquire Modular Inc, an AI software infrastructure company. The $215 billion semiconductor giant, which generated $44.5 billion in revenue over the last twelve months, continues to expand its AI capabilities through strategic acquisitions. Modular provides an AI-native software platform that enables AI models to run across different hardware architectures, including CPU, GPU, NPU, and custom ASIC systems, without requiring code rewrites for each accelerator. The company was founded by engineers who previously worked on AI infrastructure development. The acquisition aims to strengthen Qualcomm Technologies' software capabilities for AI deployment across data center and edge computing environments. The combination is intended to support Qualcomm Technologies' data center strategy and expand its relationships with model creators, developers, and cloud service providers.The move comes as Qualcomm's stock has gained nearly 18% over the past six months, though InvestingPro analysis suggests the shares are currently trading above their Fair Value. For deeper insights into Qualcomm's strategic positioning and comprehensive analysis, investors can access the detailed Pro Research Report, available for QCOM and over 1,400 other US equities. "This acquisition marks a pivotal moment not just for Qualcomm, but for the AI industry," said Cristiano Amon, President and CEO of Qualcomm Incorporated. "As agentic AI scales across data centers and edge environments, the industry is moving toward disaggregated, multi-vendor architectures that demand a more open and modern software foundation." Chris Lattner, Co-founder and CEO of Modular, stated, "Modular was founded on the belief that AI needs a more open and efficient software foundation that can span diverse hardware and deployment environments. Joining Qualcomm gives us the scale and platform reach to accelerate that mission." The transaction is expected to close in the second half of 2026, subject to customary closing conditions and regulatory approvals. Financial terms of the acquisition were not disclosed in the press release statement. Qualcomm describes itself as a connected computing company focused on AI platforms across devices, edge computing, and data centers. In other recent news, Qualcomm is in talks to acquire Tenstorrent, a startup specializing in AI chip design, with a proposed purchase price between $8 billion and $10 billion. This potential acquisition aligns with Qualcomm's strategy to expand its presence in the artificial intelligence sector. Additionally, Qualcomm has partnered with Inspecs Group plc to develop smart eyewear technology, investing $10 million in the collaboration. The partnership aims to innovate eyewear as a technology category, with Qualcomm acquiring new shares in Inspecs. Qualcomm's diversification efforts are further highlighted by analyst actions. BofA Securities raised its price target for Qualcomm to $195, citing the company's expansion into AI and data centers. Similarly, Cantor Fitzgerald increased its price target to $200, reflecting optimism about Qualcomm's data center revenue potential. Qualcomm also participated in Neura Robotics' Series C financing round, contributing to the $1.4 billion raised to enhance Neura's Physical AI platform. These developments underscore Qualcomm's strategic moves into AI and technology-driven markets. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Qualcomm to Acquire AI Software Firm Modular in $3.9 Billion Stock Deal -- Update

Qualcomm agreed to acquire the AI software company Modular for about $3.9 billion, in a bid to make artificial intelligence faster and cheaper for its customers. The semiconductor company said Wednesday that, as consideration for the acquisition, Qualcomm expects to issue up to 19.2 million shares of its common stock to equity owners of Modular. That values the deal at around $3.92 billion, based on Qualcomm's closing price of $204.13 on Tuesday. The issuance and sale of the shares will be made in a private placement, Qualcomm said. Modular provides software that allows AI to run efficiently across hardware architectures, enabling developers to deploy AI at a lower total cost. Qualcomm said it aims to help customers move AI into production from device to cloud more quickly. The deal is expected to close in the second half of this year. The announcement comes as Qualcomm is scheduled to host an investor day in New York on Wednesday. Qualcomm shares were up 1% to $206.25 in premarket trading.