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 common 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.
“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.
