Qualcomm just bought a two-year-old startup founded by former Apple engineers for $1.4 billion

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Qualcomm has just made a splashy acquisition in the chip market that’s sure to shake up the semiconductor industry in a substantial fashion. The company Qualcomm is purchasing, Nuvia, was formed in 2019 by three former engineers and chip specialists, all of whom worked at Apple on the A-series chip line that powers the iPhone and iPad. And now, Qualcomm is paying an eye-popping $1.4 billion for the firm, placing a huge bet on the team’s talent and its focus on building next-generation CPUs for use in data centers, mobile, and other devices.

Qualcomm is specifically calling out the growth of 5G as one of the reasons it’s paying such a handsome sum for a company of just a couple hundred employees founded just two years ago. “5G is further accelerating the convergence of mobility and computing. The acquisition of Nuvia builds on Qualcomm Technologies’ Snapdragon technology leadership, delivering step-function improvements in CPU performance and power efficiency to meet the demands of next-generation 5G computing,” Qualcomm said in a statement.

All three of the company’s co-founders — Gerard Williams, Manu Gulati, and John Bruno — will be joining Qualcomm, which expects to integrate the company’s chips “across Qualcomm Technologies’ broad portfolio of products,” including the modems and chips that make their way into data centers, smartphones, laptops, vehicles, and other devices.

“CPU performance leadership will be critical in defining and delivering on the next era of computing innovation,” Nuvia CEO Gerard Williams, formerly chief CPU architect at Apple, said in a statement. “The combination of Nuvia and Qualcomm will bring the industry’s best engineering talent, technology and resources together to create a new class of high-performance computing platforms that set the bar for our industry.”

Qualcomm is collecting tech and talent and taking aim at the data center industry at a time of significant change in the chip market. Many companies that once used to rely on big-name chipmakers like AMD, Intel, and Qualcomm have spent much of the last decade building out their own internal chip design teams to lessen their reliance on third-party companies and to better integrate their hardware and software. This is true not just of Apple, at which Nuvia’s co-founders gained their expertise, but also Amazon, Google, Facebook, and others, too. (Nuvia’s other two co-founders worked on chip design at Google, too.) All of these companies are building their own chips for use in everything from data centers to smart speakers and everything in between, often licensing the Arm architecture to do so.

That’s put Qualcomm at odds with companies it used to consider core partners. Apple and Qualcomm, in fact, engaged in a bitter multiyear patent infringement legal battle the two companies settled in 2019, but the message was clear: Apple was tired of paying other companies to license their tech and would rather go it alone using Arm-based designs. That was only further cemented by Apple’s landmark decision to drop Intel in the CPU field for Apple’s own custom-designed line of M1 processors, which arrived on the scene last fall powering the first of many new Apple computers to critical acclaim thanks to their huge performance gains.

While Apple and Qualcomm cut a deal for the iPhone maker to continue using Qualcomm’s modems, including its 5G ones that enable the network capabilities on the latest iPhones, Apple is reportedly hard at work on building its own cellular modems to further extricate itself from Qualcomm in the future.

And that’s where a company like Nuvia comes in. While many companies are building their own Arm-based CPUs to compete with AMD and Intel in the data center — like Amazon’s Graviton chip — Nuvia is reportedly building a more flexible custom chip core (also based on Arm) called Phoenix. That chip core could result in a variety of different CPUs down the line, not just those designed to act as data center processors.

“We’re designing our own core from the ground up,” Williams told VentureBeat last year, when the company raised $240 million in a Series B funding round. “Our secret sauce is really physical design capabilities and microarchitecture. And that’s where you see the differentiation coming into play for almost anybody that builds a processor.”

Williams said at the time that the speed and efficiency of its chip core was “very much like a mobile core in terms of size and power,” but with with “substantially higher” performance, a prescient statement to make considering Qualcomm’s plans to use Nuvia technology in its mobile Snapdragon system-on-a-chip line.

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