Qualcomm’s server and laptop ambitions may be in trouble

Arm is suing Qualcomm and Nuvia, a startup acquired by the chipmaker in 2021, alleging that the companies violated the licenses they have to use Arm’s processor design and architecture (via Reuters). Arm’s argument is that the licenses it granted Nuvia before it was acquired are not valid now that it is under new ownership. If Arm wins its case, Qualcomm could be forced to destroy any work it has done on the specific licenses in question — a significant setback to its ambitions to build desktop and server chips using Nuvia’s technology.

Qualcomm hasn’t been tight-lipped about its goals or the role the Nuvia acquisition plays in them. Earlier this year, Cristiano Amon, its chief executive, said On the edge: “Immediately after I was appointed CEO, I made the acquisition of a company called Nuvia because we wanted to have the best CPU team in the market.” He said that “you should expect Qualcomm to strive to take a leadership position in productivity. We will have to fulfill it. Our first product would be trialled next year. It will be commercial in 2023. We are public about it and people will be able to measure it.”

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

The problems apparently started when Qualcomm bought Nuvia for $1.4 billion. According to the complaint, Arm told Qualcomm it could not 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 say they spent “more than a year” trying to negotiate a deal for Qualcomm’s use of Nuvia’s licenses.

Those efforts have apparently been unsuccessful — Arm says it terminated the licenses in February 2022, telling Qualcomm it can’t use any designs made with them. However, the company suspects that Qualcomm has continued to design chips with the licenses and plans to sell them.

In a statement to On the edgeQualcomm’s general counsel Anne Chaplin said that “Arm has no right, contractually or otherwise, to try to interfere with Qualcomm or NUVIA’s innovation.” She went on to say that “Arm’s complaint ignores the fact that Qualcomm has broad , well-established license rights covering their specially designed processors, and we are confident that these rights will be upheld.”

There have been reports that Qualcomm has been shopping server processors to companies like Amazon. While the company has its own Arm licenses unrelated to Nuvia (it built laptop chips before acquiring the company), Bloomberg noted earlier this month that the company is specifically “seeking customers for a product stemming from last year’s purchase of chip startup Nuvia.”

Here is the full complaint filed by Arm: