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Arm Holdings Cancels Qualcomm Chip Design License

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Arm Holdings is terminating an architectural license deal that allows Qualcomm to use intellectual property to create processors, according to Bloomberg News.

TakeAway Points:

  • Arm Holdings is cancelling an architectural license agreement that allows Qualcomm to use intellectual property to design chips.
  • Arm has given Qualcomm a mandated 60-day notice of the cancellation of the licensing agreement.
  • Qualcomm announced a partnership with Google, a division of Alphabet, to provide a set of chips and software that will enable automakers to create their own AI voice assistants utilising the two companies’ technologies.

Qualcomm’s chip design license to end

Arm has given Qualcomm a mandated 60-day notice of the cancellation of the licensing agreement, the report said, adding that the contract allows Qualcomm to create its own chips based on standards owned by Arm.

UK-based Arm, which is majority-owned by Japan’s SoftBank Group, sued Qualcomm in 2022 for failing to negotiate a new license after it acquired Nuvia.

Arm had previously said the current design planned for Microsoft’s Copilot+ laptops is a direct technical descendant of Nuvia’s chip and it had cancelled the license for these chips.

“This is more of the same from ARM – more unfounded threats designed to strongarm a longtime partner, interfere with our performance-leading CPUs, and increase royalty rates regardless of the broad rights under our architecture license,” a Qualcomm spokesperson said in an emailed statement.

“With a trial fast approaching in December, Arm’s desperate ploy appears to be an attempt to disrupt the legal process, and its claim for termination is completely baseless. We are confident that Qualcomm’s rights under its agreement with Arm will be affirmed. Arm’s anticompetitive conduct will not be tolerated.”

The legal battle between the two tech giants is scheduled to begin in the federal court in Delaware in December.

An Arm victory in the litigation could force Qualcomm and its roughly 20 partners, including Microsoft, to halt shipments of the new laptops. It would also essentially unwind one of Qualcomm’s biggest strategic acquisitions in recent years.

Despite the public fight between the two companies that rely on each other for revenue and profit, some investors and analysts believe they will reach a settlement well ahead of the trial.

Qualcomm and Alphabet team up for automotive AI

Qualcomm on Tuesday said it was teaming up with Alphabet’s Google to offer a combination of chips and software that will let automakers develop their own AI voice assistants using technology from the two firms.

Qualcomm’s chips have long powered mobile phones with Google’s Android operating system and the company has expanded into the automotive business, with chips that can power both a car’s dashboard and automated driving systems that are used by General Motors and others. On Tuesday, Qualcomm said it is working with Google to create a version of the company’s Android Automotive OS that will run smoothly on Qualcomm chips.

While many consumers are familiar with Google’s Android Auto and Apple CarPlay that display apps from a phone when plugged into a vehicle, Google’s Android Automotive OS is an offering that automakers use behind the scenes to power a vehicle computing systems. Qualcomm and Google said automakers will be able to use the joint offering and Google’s AI technology to create voice assistants that are unique to an automaker and can work without relying on a driver’s phone.

“Typically, we have operated together, but independently – we plan a lot of things together, but we go to customers separately,” Nakul Duggal, group manager for automotive at Qualcomm, said of the Qualcomm-Google relationship. “We decided we should think about this differently because it will reduce a lot of friction and confusion.”

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