Qualcomm in talks to buy Modular as shares slide

Qualcomm is in advanced talks to acquire Modular Inc., a Silicon Valley startup that builds software tools to simplify deploying AI models across different hardware and cloud environments, for about $4 billion. Qualcomm’s shares fell about 6% on Tuesday amid a broader technology selloff. People familiar with the discussions say an announcement could come in the coming weeks, but no final agreement is guaranteed and terms could change.

Modular was founded in 2022 by former Google engineers Chris Lattner and Tim Davis. The company raised $250 million in September at a $1.6 billion valuation and has taken in $380 million in total funding. A roughly $4 billion purchase price would be more than 2.5 times that recent valuation.

On its website, Modular says the founders created the company after becoming ‘frustrated by AI’s fragmented infrastructure.’ Modular focuses on cross-platform inferencing and running models in production across different environments. Its investors include DFJ Growth, Factory, General Catalyst, Google Ventures, Greylock Partners and US Innovative Technology Fund.

Executives and investors have been watching Qualcomm ahead of the company’s investor day, where Qualcomm is expected to outline its next-generation processor strategy and discuss plans for custom data-center chips. Qualcomm’s stock has risen about 72% over the past three months and roughly 30% year to date.

The talks form part of a broader push to add software and hardware capabilities. Separately, people familiar with the discussions described talks about an AI chip startup at an estimated price of $8 billion to $10 billion. If both deals closed, they would combine infrastructure software with custom silicon to support AI inferencing and deployment outside of training environments.

Qualcomm has pursued acquisitions to expand its portfolio, including an agreement to buy Alphawave IP Group Plc for about $2.4 billion in cash and a previously proposed acquisition of NXP Semiconductors that was withdrawn after regulatory hurdles. People familiar with the Modular talks cautioned that any deal would depend on final negotiations and regulatory approvals.

Neither company commented on the reported discussions. Analysts and investors will look to Qualcomm’s investor day for more detail on its AI roadmap, how any acquisitions would fit into product plans, and whether the company will name customers for a potential custom data-center chip.