Qualcomm has agreed to acquire AI software company Modular in a stock deal valued at approximately $3.92 billion. According to reports from Essential Business Intelligence, the transaction involves issuing up to 19.2 million shares of common stock to Modular's equity holders as consideration for the deal. Based on Qualcomm's closing share price of $204.13 on Tuesday, the deal is valued at approximately $3.92 billion. The shares will be issued through a private placement, as reported by Essential Business Intelligence.
Modular develops software that enables AI applications to run efficiently across different hardware architectures, helping developers deploy AI at a lower total cost. As reported by Essential Business Intelligence, the acquisition will strengthen Qualcomm's ability to help customers move AI workloads into production more quickly, from edge devices to cloud infrastructure. The software company is known for optimizing AI across various hardware platforms, which aligns with Qualcomm's semiconductor business focus. According to Qualcomm's regulatory filing, Modular provides an open, AI-native software stack that enables AI to run efficiently across hardware architectures, with the unified platform running models with industry-leading performance across multiple chip types.
Qualcomm shares fell as much as 4.6% to $194.77 after markets opened in New York following the acquisition announcement, according to Business Standard. Despite the decline, the stock remains up about 16% so far this year. The transaction is expected to close in the second half of 2026, subject to customary closing conditions. The announcement comes ahead of Qualcomm's investor day in New York on Wednesday, as reported by Essential Business Intelligence.
The acquisition represents Qualcomm's strategic move to expand its position in the data center market as AI demand continues to skyrocket. According to recent reports, Qualcomm is looking to accelerate AI adoption from devices to the cloud through this strategic acquisition. Modular's technology offers customers versatility in how they offer AI services, with the ability to process queries via the cloud or on smartphones and other devices, requiring an open system that works on multiple chips from different suppliers. This contrasts with some Nvidia rivals who have argued that their offerings are closed off and designed to keep customers locked in.
Modular was founded in 2022 in Silicon Valley by Chris Lattner and Tim Davis, who met at Google and were 'frustrated by AI's fragmented infrastructure', according to the company's website. The acquisition represents Qualcomm's continued pursuit of tuck-in acquisitions after its deal for NXP Semiconductors NV was scrapped when it didn't receive regulatory approval. Qualcomm agreed to buy London-listed semiconductor company Alphawave IP Group Plc last year for about $2.4 billion in cash, as reported by Business Standard.
