Chip giant Qualcomm (NASDAQ: QCOM) is reportedly in advanced discussions to acquire artificial intelligence chip startup Modular Inc. in a deal valued at approximately $4 billion, according to people familiar with the matter.
Sources indicate an official announcement could come within the next few weeks, although a final agreement has not yet been reached and negotiations could still fall apart or see terms change. A Qualcomm spokesperson declined to comment, and a representative for Modular did not immediately respond.
Should this acquisition be finalized, it would represent the second major AI chip deal Qualcomm is pursuing in a short timeframe. Reports emerged earlier this month that the company is also in advanced talks to acquire AI chip startup Tenstorrent, in a potential transaction valued between $8 billion and $10 billion.
If both deals are successfully completed, Qualcomm would commit nearly $14 billion within a matter of weeks to profoundly reshape its AI chip business portfolio.
About Modular
Modular was founded in Silicon Valley in 2022 by Chris Lattner and Tim Davis, who met while working at Google. The pair reportedly started the company out of frustration with the fragmented state of AI infrastructure.
Lattner is a notable figure in programming language development, having led the creation of the Swift language. In September 2025, Modular raised $250 million at a $1.6 billion valuation, bringing its total funding to approximately $380 million.
Its investors include DFJ Growth, Factory, General Catalyst, Google Ventures, Greylock Partners, and the US Innovative Technology Fund.
The company's technology focuses on AI inference acceleration. A core product is its MAX AI inference engine, which aims to deliver the world's fastest unified AI execution performance and support high-performance, portable computing across various hardware types.
This market is expanding rapidly as more enterprises deploy AI applications in production environments. Modular's chip architecture could complement Qualcomm's existing AI accelerator designs, providing a potential fast track for the company to build competitive data center products.
Qualcomm's Aggressive AI Strategy
Over the past year, Qualcomm has been rapidly building out its AI chip capabilities through a dual strategy of in-house development and strategic acquisitions, accelerating its transformation from a mobile communications chip leader to a full-stack AI computing services provider.
On the product front, Qualcomm announced its AI200 and AI250 AI inference chips in 2025, with commercial availability planned for 2026 and 2027, respectively. In June of this year, CEO Cristiano Amon confirmed the company's return to the server CPU market, launching the new "Fēilóng" business brand covering high-performance CPUs, AI inference accelerators, and custom ASICs.
The AI200 accelerator card features 768GB of low-power memory, while the AI250 employs a near-memory computing architecture. Furthermore, Qualcomm has partnered with a leading global hyperscale cloud service provider to jointly develop custom chips, with the first products expected to be delivered in December 2026.
On the acquisition front, Qualcomm has been highly active. In 2025, it acquired London-listed Alphawave IP Group for approximately $2.4 billion to bolster high-speed chip-to-chip data transfer technology—a key capability for connecting multiple AI accelerators in data centers. That same year, it acquired the generative AI division of Vietnamese AI research company VinAI (later renamed MovianAI) to enhance its generative AI capabilities.
Earlier, it acquired NUVIA, founded by former Apple engineers, for $1.4 billion, gaining core CPU design capabilities.
More notably, just before news of the Modular talks emerged, reports surfaced that Qualcomm is also in discussions to acquire Tenstorrent. Founded by renowned chip architect Jim Keller, Tenstorrent develops AI training and inference accelerators based on the open RISC-V architecture, offering a full-stack hardware and software solution that could address Qualcomm's technology gaps in high-end data center compute chips.
If both the Tenstorrent and Modular potential acquisitions are completed, Qualcomm would possess a comprehensive AI chip product portfolio covering interconnect, inference, and even training, positioning it for more direct competition with NVIDIA (NASDAQ: NVDA), AMD (NASDAQ: AMD), and Intel (NASDAQ: INTC).
Industry Shifts and Valuation Reassessment
The AI chip market is undergoing significant transformation. The so-called inference chip sector is evolving rapidly, which is complicating—and in some cases inflating—the valuations of startups like Modular.
A recent series of transactions has prompted the market to reassess the strategic value of AI chip startups. This includes NVIDIA's reported acquisition of certain assets from Groq Inc. via a $20 billion licensing deal, and a new funding round for SambaNova Systems, which is backed by Intel Capital.
These moves indicate that major chip industry players are accelerating their efforts to acquire AI capabilities through mergers and acquisitions rather than building them entirely from scratch.
Qualcomm's stock has risen approximately 70% since April 2026, with its current market capitalization stable around $233 billion. Market optimism regarding Qualcomm's AI strategy continues to build ahead of its investor day scheduled for June 24.
Challenges and Outlook
Despite its aggressive acquisition strategy, Qualcomm faces significant challenges in the data center AI chip market. NVIDIA dominates this space, backed by years of investment in its CUDA software platform and GPU accelerators. AMD is catching up with its MI300 series accelerators, and Intel is pushing its Gaudi series AI chips.
Furthermore, given the strategic importance of AI chip technology and national security concerns surrounding semiconductor intellectual property, Qualcomm's large-scale acquisitions could face regulatory scrutiny. A previous attempt by Qualcomm to acquire NXP Semiconductors failed to receive regulatory approval.
However, CEO Cristiano Amon recently reiterated at Computex that "2026 is the year of the AI agent," predicting that AI agents will replace apps as the next computing paradigm. Under this vision, Qualcomm is attempting to position itself in both the cloud and at the edge, deploying AI computing power from milliwatt-level wearable devices to kilowatt-level data centers.
With Qualcomm's investor day approaching on June 24, there is widespread expectation that management will systematically outline the company's strategic plans in the AI infrastructure domain. Analysts and investors will be watching closely for any public response regarding the Modular and Tenstorrent negotiations, as well as updates to its data center revenue targets.
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