Qualcomm Buys Buzzy Chip Startup Modular for Nearly $4 Billion

Qualcomm will acquire the Silicon Valley startup chip company units For nearly $4 billion.

The companies announced the acquisition on Wednesday. Qualcomm He said It expects to issue up to 19.2 million shares of common stock in the deal, which is just under $4 billion based on the company’s last closing stock price.

The deal, which includes $300 million for Modular employees, comes nine months after the chip went live It raised $250 million at a valuation of $1.6 billion. It is expected to close in the second half of this year.

Modular manufactures and sells the chip software platform. It also produces a special coding language that allows developers to write AI programs to run on different chips without having to rewrite the code for each chip. The startup’s entire team, which includes two co-founders and about 150 employees, is expected to join Qualcomm. Modular will remain an independent entity for the foreseeable future, headquartered in Los Altos, California.

“We believe the future belongs to horizontal, developer-friendly platforms that can run across diverse computing environments and give customers real choice in how and where they deploy AI,” Cristiano Amon, Qualcomm’s president and CEO, said in a statement.

The deal signals Qualcomm’s growing ambitions to expand beyond chips into the mobile market, which generates the vast majority of the company’s revenue. Amon He said recently The company is working on 40 different chip designs for AI tools, including smart glasses, jewelry, earbuds, pins, and watches. But Qualcomm has also made significant progress in 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, standard open chip architecture. It is also working on custom ASIC designs, or application-specific integrated circuits, for data centers, with Chinese company ByteDance reporting. Early customer.

Modular was founded in 2022 by Chris Lattner and Tim Davis. They both worked on Google’s TPU chips before leaving to launch their own company. Lattner’s career before joining Google is storied: 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 program. (This role was later taken over by renowned AI researcher Andrei Karpathy, who recently joined Anthropic.)

Lattner and Davis wanted to create a unified software layer that would help cloud companies extract as much power as possible from GPUs and CPUs, Lattner He told WIRED In a profile published last year. In doing so, Modular challenged Nvidia’s CUDA system, a closed software system for GPUs, and AMD’s ROCm system, which is open source but not always easy to port to other chips.

This put Modular in a difficult position: it eventually secured partnerships with major chip makers, as well as hyperscalers like Amazon and even Apple, while simultaneously competing with them and the software they developed in-house.

At the time, Laettner said he thought he and Davis were tackling a software problem that had to be solved outside the big tech environment, because it was “structural.” In the end, Qualcomm’s corporate structure won out.