Qualcomm bought “the best CPU team on the market”, but now Arm is suing

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Arm is suing Qualcomm and Nuvia, a startup that acquired the chipmaker in 2021, alleging that the companies violated the licenses they have to use Arm’s processor designs and architecture (through Reuters). Arm’s argument is that the licenses it gave Nuvia before it was acquired are not valid now that it is under new ownership. If Arm wins the lawsuit, Qualcomm could be forced to destroy all the work it’s done with the specific licenses in question — a significant blow to its ambitions to create desktop and server chips using Nuvia’s technology.

Qualcomm hasn’t been quiet about its goals, or the role the Nuvia acquisition plays in them. Earlier this year, Cristiano Amon, the CEO, told: The edge“As soon as I was named CEO, I took over a company called Nuvia because we wanted to have the best CPU team on the market.” He said that “you can expect Qualcomm to strive to take the leadership position in performance. We will have to execute it. Our first product should be put to the test next year. In 2023 it will go commercial. We are there publicly and people will be able to measure it.”

According to Arm’s complaint, which you can read in full below, in 2019 it licensed Nuvia to both use its “off-the-shelf” processor designs, and to build its own designs using Arm’s architecture. Arm also gave the startup “substantial, critical, and individualized support” for its work developing server-grade processors. Arm earns its money from licensing fees, as well as royalties from products sold with its technology, such as Nvida’s computing devices with Arm chips, or the MacBooks and iPhones that use Apple Silicon (Nuvia was founded by engineers who previously worked on the A-series chips in iPhones and iPads).

The problems apparently started when Qualcomm bought Nuvia for $1.4 billion. According to the complaint, Arm told Qualcomm it couldn’t use Nuvia’s licenses without Arm’s approval after the company indicated it planned to use the startup’s technology in several products. Arm’s lawyers claim it spent “more than a year” negotiating an agreement for Qualcomm’s use of Nuvia’s licenses.

Those efforts were apparently unsuccessful — Arm says it ended licenses in February 2022 and told Qualcomm it couldn’t use designs made with it. However, the company suspects that Qualcomm has continued to design chips with the licenses and plans to sell them.

In a statement to The edgeQualcomm’s general counsel Ann Chaplin said that “Arm has no right, contractual or otherwise, to attempt to interfere with Qualcomm’s or NUVIA’s innovations.” She continued, “Arm’s complaint ignores the fact that Qualcomm has broad, established licensing rights for its custom-designed CPUs, and we’re confident those rights will be upheld.”

There are reports that Qualcomm has purchased server processors from companies like Amazon. While the company has its own Arm licenses that aren’t tied to Nuvia (it built laptop chips before it took over), Bloomberg noticed earlier this month that the company is specifically “seeking customers for a product resulting from the purchase of chip startup Nuvia last year.”

Here is the full complaint filed by Arm:

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