June 24 - Qualcomm said on Wednesday it will acquire AI startup Modular in an all-stock transaction valued at nearly $4 billion as the chipmaker seeks to expand beyond its core smartphone business.
Under the terms announced, Qualcomm expects to issue up to 19.2 million shares of its common stock to holders of Modular equity. Based on Qualcomm's last closing share price, the transaction is valued at about $3.92 billion. The companies said the deal is expected to conclude in the second half of this year.
Qualcomm has been increasing its focus on the data-center market amid rising demand for generative AI. The company is already developing processors and other AI chips for data centers, with shipments planned by the end of the year. Acquiring Modular adds a software layer to that effort, targeting the inference side of AI workloads.
Modular's software is primarily used to run, or "infer", AI models. That capability has become a central battleground for chipmakers because software stacks can shape which hardware architectures developers adopt. The acquisition places Qualcomm in direct competition with CUDA - the software platform that has been a key component of Nvidia's AI ecosystem and has helped tie large numbers of developers to Nvidia's chips.
The announcement came amid share movements in the chip sector. On the day of the announcement, Qualcomm shares were down 8.01% while Nvidia shares were down 4.13%.
For Qualcomm, the Modular purchase represents a strategic effort to couple silicon with software tooling suited to AI inference workloads in data centers. Executives have indicated the company is pursuing processors and additional AI chips across non-smartphone markets, and the Modular deal is positioned as part of that broader push. The timing for regulatory and closing processes places the expected close in the latter half of the current year.
As Qualcomm integrates Modular's software stack, the market will observe whether the combined hardware-software approach can attract developers who have largely built on competing platforms. The transaction's valuation and the share issuance mechanics will be key factors for investors watching how Qualcomm reallocates resources away from its smartphone-focused business toward data-center AI ambitions.