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After a long wait, Qualcomm’s highly anticipated Snapdragon X processors are finally making a market debut. Windows PCs powered by Snapdragon X Elite and Snapdragon X Plus will start hitting shelves next week. This is a big deal because these are the only chips rated powerful enough for Microsoft’s new AI PC ecosystem Copilot+. Artificial intelligence is a big deal today, you know. However, Snapdragon X may have an anti-climactic end if ARM wins its legal battle against Qualcomm.
ARM threatens to disrupt the Snapdragon X AI PC wave before it takes off
This high-profile legal battle began after Qualcomm acquired Nuvia, a designer of CPUs based on the ARM architecture, in 2021. The $1.4 billion acquisition laid the foundation for Snapdragon X. However, ARM alleged that Qualcomm misused a licensing deal Nubia had signed before the acquisition. According to the British firm, Nubia had licensed a technology from ARM to design server chips but Qualcomm scrapped the plans and reassigned the team to develop a laptop processor.
ARM says Qualcomm’s Snapdragon X chips are “a direct technical descendant of Nuvia’s chip” based on its technology. Since neither Qualcomm nor Nubia renewed the licensing contract after the acquisition, the license stands canceled. As such, Qualcomm’s using the technology for its PC processors is a violation of its intellectual property. ARM formally filed a lawsuit over the matter in August 2022 after the parties failed to negotiate a new licensing contract.
Qualcomm, on the other hand, says its broad license for Arm technology already covers its Snapdragon X chips. “Arm’s complaint ignores the fact that Qualcomm has broad, well-established license rights covering its custom-designed CPUs, and we are confident those rights will be affirmed,” Ann Chaplin, the company’s general counsel, said in a statement in 2022. A Qualcomm spokesperson recently told Reuters its position has not changed since ARM filed the lawsuit two years ago.
There’s a real concern in the industry
ARM’s lawsuit against Qualcomm has hardly progressed in these two years. However, there’s still a real concern that this licensing dispute could abruptly halt the shipment of new Snapdragon X-powered AI PCs. Attendees at Computex 2024, where Qualcomm unveiled its AI PC vision inviting executives from several big companies to the stage, were discussing the potential supply disruption if ARM wins the legal battle. Qualcomm’s vision and plans could come to a standstill.
“It’s definitely a real risk,” said Doug O’Laughlin, the founder of Fabricated Knowledge, a chip financial analysis firm. “The more successful (the laptops are), the more fees ARM can get eventually.” Qualcomm has signed deals with around 20 PC makers for AI PCs powered by the Snapdragon X Elite and Snapdragon X Plus. Nearly two dozen laptops are expected to go on sale starting on June 18. An ARM victory would deal a severe blow to the plans.
“ARM’s claim against Qualcomm and Nuvia is about protecting the ARM ecosystem and partners who rely on our IP and innovative designs, and therefore enforcing Qualcomm’s contractual obligation to destroy and stop using the Nuvia designs that were derived from ARM technology,” an ARM spokesperson said. The SoftBank-owned British company wants to destroy Snapdragon X before Qualcomm and Microsoft even realize the dream of Copilot+ AI PCs.
Interestingly, despite all this, ARM and Qualcomm have a close relationship in the industry. ARM is Qualcomm’s biggest supplier, while Qualcomm is ARM’s second-biggest customer. Hopefully, the two firms will find a solution that doesn’t disrupt the emerging AI PC ecosystem. The trial is scheduled to begin in the federal court in Delaware in December. However, some industry experts believe the companies will settle the case out of court in the coming months.
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