Qualcomm, a semiconductor company best known for its snapdragon chips, will acquire AI software startup Modular for around $3.92 billion, the two companies announced Tuesday.
The San Diego-based Qualcomm expects to issue 19.2 million shares to Modular’s equity holders in the all-stock transaction.
“Together, we can make AI development more accessible and performant for developers, strengthen portability across hardware, and help grow an open ecosystem that broadens participation and speeds innovation,” said Chris Lattner, cofounder and CEO of Modular.
Silicon Valley’s Modular was founded in 2022 by Chris Lattner and Tim Davis, who met during their time as Google engineers.
Lattner said fragmented software wasn’t designed to scale across all the AI hardware that’s now available. Modular positions its platform for these software companies to use as a neutral layer that supports all kinds of AI chips.
Lattner and Davis, in an interview with Wired last year, said they are both convinced that the disconnect between fragmented software and AI chips was an issue that must be solved outside of a Big Tech environment because it lacks the focus on a company’s individual software that other companies typically have.
“When I left Google I was a little bit depressed, because I really wanted to solve this,” Lattner said. “What we realized is that it’s not about smart people, it’s not about money, it’s not about capability. It’s a structural problem.”
Despite these comments, Lattner believes the sale won’t distract from the company’s focus.
“The acquisition by Qualcomm enables us to accelerate our mission without deviating from supporting hardware from all vendors. This will accelerate our progress and path, and their vision is expansive: spanning edge to cloud, CPU, GPU, NPU, and custom ASICs and perhaps more,” Lattner said on LinkedIn.
Akash Palkhiwala, Qualcomm’s chief financial officer and chief operating officer, said on LinkedIn that Modular’s “write once, run anywhere” platform complements Qualcomm’s hardware and gives customers a choice in how and where they deploy AI.
“We believe the future belongs to developer-friendly, horizontal platforms that can run across diverse compute environments and give customers real choice in how and where they deploy AI,” Qualcomm President and CEO Cristiano Amon said.
Qualcomm stock fell 3 percent after the acquisition was announced, but it jumped around 11 percent in after-hours trading.
Not including the after-hours session, the company’s stock has increased nearly 27 percent in the past year.
Reuters contributed to this report.
