San Diego's Qualcomm to buy startup Modular for $3.9 billion in AI push

Noelle Harff, The San Diego Union-Tribune on Jun 29, 2026

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SAN DIEGO — Qualcomm agreed to acquire AI software startup Modular in an all-stock deal valued at $3.92 billion, the San Diego chipmaker said Wednesday during its Investor Day, as it works to expand beyond smartphone chips into data center and AI markets.

Equity holders of Modular will receive up to 19.2 million newly issued Qualcomm common shares through a private placement, per an SEC filing. The $3.9 billion figure is based on Qualcomm’s Tuesday closing share price of $204.13, according Bloomberg News, which first reported the deal.

Modular is an AI software company that streamlines integration across different chips and hardware platforms.

This specialization is integral to Qualcomm’s data center ambitions, as it aims to compete in the inference space.

Inference is the deployment phase of AI, and it’s where Qualcomm is positioning itself to deliver.

Until recently, AI data centers were built around training — the process of creating AI models. Nvidia, the market leader, made billions supplying these specialized chips for companies like Anthropic and OpenAI to create their advanced models.

Now, as AI companies ship their models, data centers demand different chips to run them.

Qualcomm aims to capitalize on this new demand, but there’s one challenge: software lock-in.

Think of it like this: You own an iPhone with all of your contacts on your iCloud — then you buy an Android. It’s difficult to transfer your data between the two.

The same phenomenon is playing out inside data centers. Even if Qualcomm comes out with advanced AI hardware — which it recently did — Nvidia’s CUDA software runs in most AI data centers today.

Durga Malladi, senior vice president of technology planning, edge solutions and data center at Qualcomm, acknowledged this during an interview with the Union-Tribune earlier this year. “What really matters is how easy you make it for end developers to use your racks,” he said.

That’s where Modular comes in.

“Modular is the portable alternative to Nvidia’s software stack, designed from day one for every AI accelerator,” said Tim Davis, co-founder and president of Modular, during Investor Day.

The hardware-agnostic AI software stack makes it easy to integrate into all AI hardware, including Qualcomm’s new AI300 inference rack.

The deal is expected to close in the second half of 2026.

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