Qualcomm Inc. is in advanced talks to acquire Modular Inc., an artificial intelligence infrastructure software company, in a transaction valuing the startup at approximately $4 billion. According to people familiar with the matter, an announcement could come as soon as the coming weeks, though a final agreement is not guaranteed and details could still change. Qualcomm declined to comment, and a Modular representative could not immediately be reached.

The acquisition represents Qualcomm's effort to expand its product line and establish itself as a credible competitor to market leader Nvidia Corp. in the intensifying AI infrastructure market. Qualcomm's stock has risen 30% this year, driven by surges in April and May that reflect investor appetite for chipmakers positioned in AI.

Modular was founded in 2022 in Silicon Valley by Chris Lattner and Tim Davis, who met at Google and were, according to the company's website, "frustrated by AI's fragmented infrastructure." The company raised $250 million at a $1.6 billion valuation in September, bringing its total capital raised to $380 million. Its backers include DFJ Growth, Factory, General Catalyst, Google Ventures, Greylock Partners, and the US Innovative Technology Fund.

The competitive landscape for inferencing chips has become increasingly complex, reshaping valuations for startups in the sector. Nvidia's reported $20 billion licensing agreement to acquire assets from Groq Inc., alongside a new funding round for Intel Capital-backed SambaNova Systems Inc., have prompted market participants to reassess the strategic value these companies represent within the broader AI ecosystem.

Qualcomm has pursued tuck-in acquisitions in recent years following the collapse of its attempted deal for NXP Semiconductors NV due to lack of regulatory approval. The company acquired London-listed semiconductor company Alphawave IP Group Plc last year for approximately $2.4 billion in cash.