SAN DIEGO, California: Qualcomm said on June 24 it will acquire AI startup Modular in an all-stock deal valued at nearly $4 billion, giving the chipmaker software designed to run artificial intelligence models across different processors without requiring developers to write code for each one.

The acquisition is part of Qualcomm's broader effort to expand beyond smartphone chips and build a stronger position in the fast-growing market for data-center computing and generative AI.

Qualcomm expects to issue up to 19.2 million shares of common stock to Modular's equity holders. Based on Qualcomm's last closing price, the transaction is valued at about $3.92 billion, according to a Reuters calculation.

Qualcomm shares were down about 4% in late-morning trading.

Modular develops software primarily used to run, or "infer," AI models. Inference refers to the process of using trained AI systems to generate answers, images, code or other outputs.

The company has positioned its software as a neutral layer for AI computing, supporting chips from Nvidia, AMD and other vendors. That approach could help Qualcomm compete with Nvidia's CUDA platform, which has been central to the chipmaker's dominance in AI by linking developers closely to its hardware.

"Qualcomm is betting that by owning software that squeezes more inference more efficiently out of hardware, it can stake a claim in the data center market," Emarketer analyst Jacob Bourne said.

Nvidia remains the dominant supplier of AI chips, but competitors are increasingly trying to challenge its position by offering custom chips and software that can work across multiple types of processors.

"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," Qualcomm CEO Cristiano Amon said.

Qualcomm has been working to reduce its dependence on smartphone processors, which still account for the bulk of its revenue. It has announced plans to begin shipping data-center processors and other AI chips by the end of 2026.

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

Qualcomm is also considering other AI-related acquisitions. The Information reported last week that the company is in talks to buy AI chip startup Tenstorrent for between $8 billion and $10 billion.