Qualcomm Buys Buzzy Chip Startup Modular for Nearly $4 Billion

Qualcomm will acquire Silicon Valley chip startups Modular about $4 billion.

The companies announced the purchase on Wednesday; Qualcomm he said expects to issue 19.2 million shares of common stock in the deal, which is worth less than $4 billion based on the company’s last share price.

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

Modular manufactures and sells chip software. It also creates a programming language that allows developers to write AI programs to run on different chips without rewriting the code for each chip. The entire founding team, which includes two co-founders and approximately 150 employees, is expected to join Qualcomm.

“We believe the future is one of user-friendly, cross-platform platforms that can travel in a variety of ways and give customers the freedom to choose how to deploy AI,” said Qualcomm President and CEO Cristiano Amon. words.

The deal reflects Qualcomm’s growing ambitions to expand beyond the chips market for mobile devices, which brings in more revenue for the company. Ammon recently said the company has been working on 40 different types of AI devices, including smart glasses, jewelry, headphones, pins, and watches. But Qualcomm has also been pushing into the data center market, which requires more powerful chips.

Late last year, the company acquired Ventana Micro Systems, a startup that focuses on building CPU servers based on RISC-V, an open chip architecture. It is also working on ASIC designs, or application integrated circuits, for data, while China’s ByteDance says the first customer.

Modular was founded in 2022 by Chris Lattner and Tim Davis. Both worked on TPU chips for Google before leaving to start their own company. Lattner’s work before Google goes back a long way: He created the open source development project LLVM, as well as Apple’s Swift language. Lattner was also briefly the head of Tesla’s Autopilot program. (Prominent AI researcher Andrej Karpathy, who recently joined Anthropic, later took part.)

Lattner and Davis wanted to create a unified software that helps cloud businesses squeeze as much juice as possible from GPUs and CPUs, Lattner said. he told WIRED in a history published last year. In doing so, Modular challenged Nvidia’s CUDA, a closed program for GPUs, and AMD’s ROCm, which is open but always easy to port to other chips.

This put Modular in a difficult position: It eventually found partnerships with major chipmakers, as well as hyperscalers like Amazon and Apple, while competing with software it developed internally.

At the time, Lattner said he believed he and Davis were dealing with a software problem that needed to be solved outside of the Big Tech space, because it was “structural.” In the end, the Qualcomm model won out.