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Modular's platform supports seven major chips, including

Nvidia ( NVDA ),

AMD, and Apple

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CEO Lattner emphasizes enabling competition in AI chips

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Modular plans to expand into AI training market with new

funding

By Krystal Hu

Sept 24 (Reuters) - AI startup Modular said on Wednesday

it raised $250 million in a funding round valuing it at $1.6

billion, as it aims to challenge Nvidia's ( NVDA ) software stranglehold

on the AI computing market.

The funding, which nearly tripled the company's valuation

from two years ago, was led by U.S. Innovative Technology fund.

DFJ Growth and all existing investors, including GV, General

Catalyst and Greylock also joined the round.

Founded in 2022 by veteran engineers at Apple and Google,

Modular's platform is designed to allow developers to run their

AI applications across a variety of computer chips without

having to rewrite code for each one. It now serves cloud

providers such as Oracle and Amazon, as well as chipmakers

Nvidia ( NVDA ) and AMD.

Nvidia ( NVDA ) controls over 80% of the high-end AI chip market,

partly thanks to its proprietary CUDA software, which locks over

4 million global developers into its ecosystem.

Modular says it has adopted what it calls a "Switzerland"

strategy to be a neutral software layer.

Chris Lattner, co-founder and CEO of Modular, said the goal

is not to defeat the market leader. "What we're focused on is

not like pushing down Nvidia ( NVDA ) or crushing them. It's more about

enabling a level playing field so that other people can

compete," he said.

It plans to sell the software directly to enterprises on a

consumption basis and through revenue-sharing partnerships with

cloud providers.

The company's strategy has attracted investors betting on a

multi-vendor future for AI hardware. Sam Fort, partner at DFJ

Growth, compared Modular to "VMware for the AI era", which

supported companies to work across CPUs.

"Modular is trying to create the AI hypervisor that will

allow you to port workloads across different vendors," Fort

said.

The company, with about 130 employees, plans to use the new

capital to expand its engineering and go-to-market team. The

funds will also help the company expand from its current focus

on AI inference into the AI training market.

(Reporting by Krystal Hu in San Francisco; Editing by Lincoln

Feast.)