Qualcomm will acquire Silicon Valley chip startup Modular for nearly $4 billion.
The companies announced the acquisition on Wednesday; Qualcomm he said expects to issue up to 19.2 million shares of common stock in the deal, or nearly $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 valuation of $1.6 billion. It is expected to be completed in the second half of this year.
Modular produces and sells a chip software platform. It also creates a proprietary coding language that allows developers to write AI software that runs on different chips without having to rewrite code for each chip. The startup’s entire team, which includes two co-founders and about 150 employees, is expected to join Qualcomm.
“We believe the future belongs to developer-friendly, horizontal platforms that can run across a variety of computing environments and give customers real choice in how and where they deploy AI,” said Qualcomm President and CEO Cristiano Amon in statement.
The deal signals Qualcomm’s growing ambitions to expand beyond chips into the mobile device market, which generates the huge majority of the company’s revenue. Ammonium he recently said the company is working on 40 different chip designs for AI gadgets, including sharp glasses, jewelry, earbuds, pins and watches. However, Qualcomm has also made a mighty push into the data center market, which requires more powerful chips.
Delayed last year, the company acquired Ventana Micro Systems, a startup that builds server processors based on the open standard RISC-V chip architecture. It is also working on custom ASIC designs, or application-specific integrated circuits, for data centers, with China’s ByteDance reporting early customer.
Modular was founded in 2022 by Chris Lattner and Tim Davis. The two worked on Google’s TPU chips before leaving to start their own company. Lattner’s career before joining Google is prolific: he founded the LLVM open-source compiler infrastructure project, as well as Apple’s Swift programming language. Lattner also briefly served as head of Tesla’s Autopilot software. (Notable artificial intelligence researcher Andrej Karpathy, who had recently joined Anthropic, later took on this role.)
Lattner and Davis wanted to create a unified software layer that would facilitate cloud companies get the most out of GPUs and CPUs, Lattner told WIRED in a profile published last year. Modular thus challenged Nvidia’s CUDA, a closed software system for GPUs, and AMD’s ROCm, which is open source but not always straightforward to port to other chips.
This put Modular in a tough position: It ended up securing partnerships with these enormous chipmakers, as well as hyperscalers like Amazon and even Apple, while competing with them and the software they developed internally.
Lattner said at the time that he believed he and Davis were struggling with a software problem that needed to be solved outside the Huge Tech environment because it was “structural” in nature. Ultimately, Qualcomm’s structure won.