Prime Highlights
- Qualcomm will acquire AI startup Modular in an all-stock deal worth nearly $4 billion to strengthen its AI software capabilities.
- Modular’s technology allows AI models to run across different chip architectures without requiring separate code for each processor.
Key Facts
- Qualcomm is one of the world’s largest semiconductor companies and generates most of its revenue from smartphone chips.
- Modular specializes in AI inference software and supports hardware from multiple chipmakers, including Nvidia and AMD.
Background
In an all-stock deal worth $4 billion, Qualcomm announced that it intends to buy AI startup company Modular, thus increasing its capabilities in the fast-growing artificial intelligence space, and moving from producing chips specifically for smartphones.
This deal will enable Qualcomm to gain access to Modular’s software platform, where AI models can be made to operate on different types of processors without needing to be programmed specifically for each one of them.
With this deal, Qualcomm is now going to compete directly against Nvidia, which is responsible for the CUDA software platform, and which helped the chipmaker to dominate the AI industry because of its ability to attract numerous programmers into its hardware ecosystem.
Modular specializes primarily in AI inference, which is a stage when trained AI models start to produce results. Inference has become a very important aspect of competition between chipmakers since they have been looking for alternatives to Nvidia’s technology and have started to design customized AI chips.
The startup has positioned itself as a neutral software platform that supports chips from multiple manufacturers, including Nvidia and AMD. Qualcomm said it believes future AI growth will be driven by developer-friendly platforms that can operate across a wide range of computing environments and offer customers greater flexibility.
The acquisition is expected to be completed in the second half of the year. It forms part of Qualcomm’s broader strategy to expand deeper into AI and data-center markets and reduce its dependence on smartphone chips, which remain its largest source of revenue.
The company is also exploring further expansion opportunities and has reportedly held discussions about acquiring AI chip startup Tenstorrent in a deal valued between $8 billion and $10 billion.