Chip giant Qualcomm announced the acquisition of Silicon Valley startup Modular for nearly $4 billion. The deal, disclosed today, involves issuing up to 19.2 million shares of common stock, valued at just under $4 billion based on the last closing price. The acquisition comes nine months after Modular raised $250 million at a $1.6 billion valuation and is expected to close in the second half of this year.
A software platform bridging the gap between chips and AI
Modular develops a chip software platform and a proprietary coding language that allows developers to write AI code that runs on different chips without rewriting for each. The startup's entire team, including co-founders and around 150 employees, will join Qualcomm. "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," said Qualcomm president and CEO Cristiano Amon.
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Expanding beyond mobile chips into the data center
The acquisition signals Qualcomm's growing ambitions to expand beyond the mobile device chip market, which generates the bulk of its revenue. Amon recently stated the company is working on 40 different chip designs for AI gadgets, including smart glasses, jewelry, earbuds, pins, and watches. However, Qualcomm is also making a major push into the data center market, which requires more powerful chips.
Late last year, the company acquired Ventana Micro Systems, a startup focused on server CPUs based on RISC-V. It is also working on custom ASIC designs for data centers, with China's ByteDance reported as an early customer. To understand the broader trend of tech acquisitions, one can compare this move with the lawsuit by Alibaba against the US government, highlighting how tech firms navigate legal and market challenges.
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The visionary founders behind Modular
Modular was founded in 2022 by Chris Lattner and Tim Davis, both former members of Google's TPU chip team. Lattner's storied career includes creating the LLVM compiler infrastructure and Apple's Swift programming language. He also briefly led Tesla's Autopilot software. Lattner and Davis aimed to create a unifying software layer to help cloud businesses maximize GPU and CPU performance, challenging Nvidia's CUDA and AMD's ROCm.
A delicate balance between partnership and competition
Modular secured partnerships with Nvidia, AMD, hyperscalers like Amazon, and even Apple, while simultaneously competing with them. Lattner believed the software problem they tackled needed to be solved outside Big Tech. Ultimately, Qualcomm's structure prevailed. In the AI landscape, techniques like transfer learning and fine-tuning enable concrete results with limited data, a concept Modular aimed to simplify at the hardware infrastructure level.
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The deal marks a milestone for Qualcomm as it strives to become a dominant player in enterprise AI and data centers, leveraging Modular's technology to offer a unified software platform. For more information about the company, refer to the Qualcomm Wikipedia page.
Source: https://www.wired.com/story/qualcomm-buys-buzzy-chip-startup-modular-for-nearly-dollar4-billion
