Arm Files Lawsuit Against Qualcomm and Nuvia for Breach of License Agreements

[Xiao_Xi]

why are Samsung and MediaTek recently signing GPU deals if non Arm GPUs are dead?

The recently announced partnership between Nvidia and MediaTek seems to contradict Qualcomm's claims.

Nvidia, MediaTek partner on connected car technology

Nvidia Corp and MediaTek Inc on Monday said they will collaborate on technology to power advanced vehicle infotainment systems that can stream video or games or interact with drivers using artificial intelligence.

www.reuters.com

 

[deconstruct60]

Many reasons:

• Stock options/grants. ARM employees hold shares of ARM - which is usually how tech companies add additional compensation without using cash. Those shares would have been converted to Nvidia shares.

How do Arm employees own shares of Arm when Arm is owned by Softbank?

Japan’s Softbank to buy chip-design powerhouse ARM for $32 billion

Japan's Softbank has agreed to acquire U.K. semiconductor firm ARM Holdings in a deal worth over $32 billion, the companies announced on Monday.

www.cnbc.com

That whole " huge pay day conversion into 'hot bucks to spend' " thing already happened years ago. This would be
Softbank owns Arm. [ Did Softbank give some Arm folks some "Arm funny money' shares. Not sure but that is not normally how acquisitions work. Some relatively very small number of executives could have 'golden parachutes' of 'if arm sold then block grant' clauses, but wide scale , super minority share ownership seems doubtful. ]

Arm holdings disappeared as publically traded stock a long while ago at this point.

arm - Yahoo Finance

At Yahoo Finance, you get free stock quotes, up-to-date news, portfolio management resources, international market data, social interaction and mortgage rates that help you manage your financial life.

finance.yahoo.com

• Nvidia employees also get stock grants, which ARM employees are missing out on.

Apple issues stock grants which folks working at Ford miss out on. Whoopy-do. Folks who don't work a company don't get what folks at other companies get.

It is specular sense of entitlement that company employee at company B are entitled to the same equity returns that Company A has.

View attachment 2209091

The boards of Nvidia, SBG , and Arm is a bit misleading. Arm is owned by SBG. So some 'co equal ' board voting thing here is largely a farce. Arm's board is 'rubber stamping' what SBG board says. Arm exists as a somewhat 'independent' entity in part because was one of the terms of deal for acquisition demanded by UK goverment. It also plays into Softbank's play the 'buy'em and flip'em' private equity role they like to play. ( more of an investment guru house than a company that does products/services).


Nvidia is paying Softbank. NOT Arm. The stock/equity to the Arm employees is also not to Arm.

Nvidia did a pre-payment cash infusion into Arm. That was the primary upside that Arm got out of this. Hopefully it was structured so that any 'break up fee' largely went to Arm (not Softbank) also. [ to help keep Arm viable as a long term entity/subsidiary until something more stable got worked out. ]

This would semi-explain the ferocity that ARM is going after one of its main customers, Qualcomm.

Actually it doesn't. Can see why Softbank is mad (difn't find a bigger fool to overpay for Arm), but it is Softbank that is largely loosing out getting paid here.

Arm employees would have to be as dumb as a rock not to know that this deal had major regulartory hurdles. The previous 2016 deal to sellout to Softbank ran into major problems and Softbank wasn't even a substantive customer of Arm. Any Arm employee who was spending that Nvidia stock money in their head before the deal closed is clueless. Buying a lottery ticket would have been more entertaining. That was about the same odds.

 

[deconstruct60]

The recently announced partnership between Nvidia and MediaTek seems to contradict Qualcomm's claims.

Nvidia, MediaTek partner on connected car technology

Nvidia Corp and MediaTek Inc on Monday said they will collaborate on technology to power advanced vehicle infotainment systems that can stream video or games or interact with drivers using artificial intelligence.

www.reuters.com

Not necessarily a contradiction as much as it is indicative that Qualcomm is tell 'half truths' . They are pulling something out of the context and then wrapping another 'story' around that. I don't think Qualcomm completely made up the whole story. However, this is very strong evidence that they are not telling the 'whole truth'.

Not sure if MediaTek has a Arch license , but if Arm has now sold 'too many' Arch license there may not enough of a base tech license left to not unbundle the standard solution. If Samsung, Mediatek , Qualcomm , and Apple leave TLA , what left in the smartphone market SoC dies ? That is just market forces ; not 'Arm hates Qualcomm'.

Likewise if fab process tech trends is forcing vendors into chiplets at the phone SoC scale, again that really isn't a 'Arm hates Qualcomm' story when viewed at the big picture level.

 

[Xiao_Xi]

it is Softbank that is largely loosing out getting paid here.

[SoftBank chief executive Masayoshi] Son announced last year that he would step back from day-to-day operations at SoftBank to devote himself to turbocharging Arm’s growth.

Arm seeks to raise prices ahead of hotly anticipated IPO

SoftBank-owned group aims to charge more for each chip design in radical shake-up of business model

www.ft.com

That is just market forces ; not 'Arm hates Qualcomm'.

Arm likes MediaTek better than Qualcomm, at least publicly. Arms mentioned MediaTek in the press release for its last two TCSs.

New Arm Total Compute Solutions Enable a Mobile Future Built on Arm

Announcing Arm TCS23, the platform for mobile computing and the next-generation of immersive digital experiences.

www.arm.com

Arm Total Compute Solutions Redefine Visual Experiences and Supercharge Mobile Gaming

New Arm Total Compute Solutions address every level of performance, efficiency and scalability for specialized processing across all consumer device markets.

www.arm.com

I find it strange that in the press realese of TCS23 Arm publishes quotes from phone manufacturers (customers of their customers) and factories (suppliers of their customers). They seem to want to replace the role of their customers.

Arm also said it has "taped out" the Cortex-X4 at Taiwan Semiconductor Manufacturing Co, which means it had a chip manufactured at the factory, an expensive process usually done by chip designers that sell the final chip.

Asked by Reuters during a briefing if the tape out meant Arm was making a chip to sell instead of its long-time business model of providing the blueprint to chip makers, Chris Bergey, the general manager of Arm's Client Line of Business, said this was a step it sometimes takes to help test out new manufacturing technology for customers.

"Arm is not in the business of selling chips. That's not what we do," he said.

SoftBank's Arm rolls out new smartphone tech, MediaTek signs up to use

SoftBank Group Corp owned chip designer Arm on Monday rolled out new technology for mobile devices and Taiwan smartphone chip maker MediaTek Inc said it will be using it for its next-generation product.

www.reuters.com

P.S. Fifteen companies have created the RISC-V software ecosystem, including Qualcomm, MediaTek, Samsung and Google/Android. I find it curious that companies that rely so heavily on ARM invest so much in RISC-V.

Rise: RISC-V Software Ecosystem – Linux Foundation Project

riseproject.dev

 

[Xiao_Xi]

Qualcomm won the lawsuit for the most part. Of the three questions the jury had to answer,

• Whether Nuvia has breached section 15.1(a) of Nuvia ALA?
• Whether Qualcomm has breached section 15.1(a) of Nuvia ALA?
• Are Qualcomm products using Nuvia technology covered under Qualcomm ALA?

Qualcomm won two and the jury could not agree on the other.

After more than nine hours of deliberations over two days, the eight-person jury could not reach a unanimous verdict on the question of whether startup Nuvia breached the terms of its license with Arm.
But the jury found that Qualcomm - which purchased Nuvia for $1.4 billion in 2021 - did not breach that license.
The jury also found that Qualcomm's chips, created using Nuvia technology and central to Qualcomm's push into the personal computer market, are properly licensed under its own agreement with Arm, clearing the way for Qualcomm to continue selling them.

https://www.reuters.com/legal/us-jury-deadlocked-arm-trial-against-qualcomm-still-deliberating-2024-12-20/

Summary of each day of the trial:

Qualcomm vs. Arm trial, Day 1 – Opening statements and surprising revelations – Tantra Analyst

Qualcomm is one of the largest customers of Arm. However ever since Qualcomm announced that it is acquiring Nuvia, the two companies have been at odds regarding

www.tantraanalyst.com

Qualcomm vs. Arm trial, Day 2 – Is processor design derivative of Instructing set architecture (ISA)? – Tantra Analyst

www.tantraanalyst.com

Qualcomm vs. Arm trial, Day 3 – Testimonies end, dispute funneled down to two key questions – Tantra Analyst

www.tantraanalyst.com

Qualcomm vs. Arm trial, Day 4 – Both parties rest their case, and jury deliberations begin. – Tantra Analyst

www.tantraanalyst.com

 

[Gnattu]

It is not that unexpected because it would be very unreasonable to stop Qualcomm's CPU business, but it was quite interesting that Qualcomm does not need to pay extra fees at all.

 

[deconstruct60]

It is not that unexpected because it would be very unreasonable to stop Qualcomm's CPU business, but it was quite interesting that Qualcomm does not need to pay extra fees at all.

Since Qualcomm owns Nuvia, there is nothing here that leaves them completely off-the-hook for more penalty fees. They bought both Nuiva's assets and liabilities. That is still somewhat unresolved. It appears that the jury did not 100% 'buy' the notion that Qualcomm's ALA gives them a free pass on anything other contract they are bound to.

That may take the form of putting a server SoC on the market they don't want to do, but it would cost them real money.