Qualcomm said to be in advanced talks to buy AI-software firm Modular for about $4bn

Qualcomm is in advanced talks to acquire Modular, a startup that builds software for running artificial-intelligence workloads, in a transaction that would value the company at about $4 billion, according to reports citing people familiar with the matter. The deal, if completed, would mark another aggressive step in the chipmaker's push beyond its smartphone roots and deeper into the data-center and AI-infrastructure markets.

A transaction could be announced within the coming weeks, the reports said, though the people cautioned that no final agreement has been reached, the terms could still change, and the discussions could yet collapse without a deal. A spokesperson for Qualcomm declined to comment, and representatives for Modular could not immediately be reached.

The price under discussion would represent a substantial step up for Modular. The startup raised capital at a valuation of roughly $1.6 billion only about nine months ago, bringing its total funding to several hundred million dollars from a roster of prominent venture investors. A $4 billion price would more than double that figure, reflecting the intense competition among chipmakers to secure the software and engineering talent needed to compete in AI.

Modular's appeal lies in what it does rather than the chips it makes. The company develops infrastructure software designed to help organizations build and deploy AI applications across different types of hardware and cloud platforms through a unified framework, including an inference engine and its own programming language. It was co-founded by an engineer well known in the industry for earlier work on a widely used programming language and on autonomous-driving software. For Qualcomm, that software layer could complement its own accelerator roadmap as it tries to make its hardware easier for customers to adopt.

The potential acquisition fits a broader pattern under chief executive Cristiano Amon, who has been steering Qualcomm away from its traditional reliance on the cyclical handset market and toward higher-margin areas such as data-center processors and custom chips. It would be the company's second sizeable AI-infrastructure move in a matter of weeks, following separate reports that it was pursuing a much larger acquisition of an AI chip startup. Qualcomm has also made a string of related purchases over the past year, picking up companies specializing in open-standard processor designs and high-speed interconnect technology, as it assembles the pieces for a data-center push.

The reported talks also underscore where the battle to challenge the dominant player in AI accelerators is increasingly being fought. Beyond raw silicon, the software that gets AI workloads to run efficiently across different chips has become a critical competitive front, and acquiring an established framework could help Qualcomm close that gap rather than building one from scratch.

The timing is notable, with the reports surfacing just ahead of a scheduled investor event at which management is expected to detail its AI strategy. Analysts will be watching for any on-the-record acknowledgment of the discussions and for updated targets for the company's data-center ambitions. Qualcomm shares had eased in the sessions around the reports, and the company is due to report quarterly results later in the summer, which would offer the first formal opportunity for management to address any completed transaction and its financial impact.