Qualcomm is in advanced talks to acquire AI chip startup Modular Inc. in a multibillion-dollar deal, signaling a major push into data center AI infrastructure beyond its core smartphone business.

What happened

Qualcomm is reported to be in advanced talks to acquire Modular Inc., an AI chip startup, in a multibillion-dollar transaction. The deal, if completed, would represent Qualcomm's entry into markets currently led by larger AI chip competitors such as Nvidia.

What to watch

Investors should track how Qualcomm integrates Modular Inc.'s technology into its product roadmap and customer relationships, as well as the final deal size and expected contribution to AI data center revenue. Note that forecast earnings are expected to decline by an average of 2.6% per year for the next 3 years, so a large acquisition could increase execution risk if returns are slower than hoped.