Qualcomm and Arm Return to Court With Billions of Dollars at Stake

Qualcomm and Arm have returned to federal court in Delaware for another major legal battle, with Qualcomm accusing Arm of breaching contractual obligations and interfering with its business relationships. The five-day trial could have consequences worth billions of dollars because Qualcomm is seeking to suspend royalty payments to Arm for as long as five years, although the judge is considering whether that remedy is legally available.

The latest dispute is separate from the earlier Arm lawsuit over Qualcomm’s acquisition of Nuvia. Qualcomm prevailed on the key issues in that 2024 trial, and a Delaware court entered final judgment in Qualcomm and Nuvia’s favor in September 2025. The new case instead centers on Qualcomm’s own architecture licensing agreement with Arm, alleged failures to provide chip-testing tools, Arm’s 2024 attempt to terminate Qualcomm’s license and allegations surrounding a prospective Qualcomm chip deal with Meta.

Key takeaways

• Qualcomm and Arm began another trial in Delaware on October 5, 2026.
• Qualcomm alleges Arm failed to provide certain chip-testing tools required under its agreement.
• Qualcomm says Arm’s disclosure of its 2024 license-termination threat hurt negotiations for a chip deal with Meta.
• Qualcomm claims the Meta deal ultimately lost about $170 million in value.
• Qualcomm is seeking a remedy that could allow it to stop paying Arm royalties for up to five years.
• The potential royalty impact could therefore reach billions of dollars.
• Arm disputes Qualcomm’s allegations and says the Meta deal was affected by Meta’s changing priorities rather than Arm’s licensing dispute.
• A separate part of the proceedings examines whether Arm negotiated in good faith over the next generation of its chip technology.
• Qualcomm says Arm’s proposed royalty increase between architecture versions was as much as 1,800%.
• Qualcomm’s current agreement with Arm runs through 2033.
• Arm reported that Qualcomm accounted for 9% of its fiscal 2026 revenue, highlighting the commercial importance of the relationship.

Why Qualcomm and Arm are back in court

The latest litigation traces back to a lawsuit Qualcomm filed against Arm in Delaware in April 2024.

According to Arm’s own SEC filings, Qualcomm initially alleged that Arm had failed to satisfy delivery obligations under Qualcomm’s Architecture License Agreement, or ALA. Qualcomm later amended its complaint to include allegations concerning Arm’s notice that Qualcomm was allegedly in breach of the agreement, as well as related tort and competition claims.

Qualcomm subsequently added claims involving Arm’s Technology License Agreement.

In 2026, the litigation became procedurally more complicated. Qualcomm attempted to add Arm Limited, the subsidiary through which Arm has historically conducted much of its business, to the existing lawsuit. After that request was denied, Qualcomm filed a separate action against Arm Limited.

The two cases were later consolidated, and Qualcomm filed another amended complaint in March 2026. Arm has denied Qualcomm’s allegations and said it intends to vigorously defend itself.

The result is a new trial focused on the commercial relationship between two companies that remain deeply dependent on each other despite their increasingly bitter dispute.

Qualcomm says Arm withheld essential testing tools

One of Qualcomm’s central claims concerns chip-testing tools.

Qualcomm alleges that Arm was required under its contractual arrangements to provide tools necessary for Qualcomm to test and develop chips using Arm technology, but that Arm failed to deliver those tools as required.

The allegation is important because Qualcomm’s relationship with Arm is not simply a conventional supplier relationship.

Arm develops and licenses fundamental CPU architecture and related intellectual property used by semiconductor companies around the world. Qualcomm uses Arm technology as part of its chip-development process across smartphones, PCs and other computing products.

If access to important development or testing resources is restricted, the effect can extend beyond a contractual disagreement.

It can potentially affect engineering schedules, product development and customer negotiations.

Arm disputes Qualcomm’s claims.

The court will therefore have to determine not only what the agreements required, but whether Arm’s actions constituted a breach and, if so, what financial consequences should follow.

The Meta deal adds another layer to the dispute

The most commercially specific allegation involves Meta Platforms.

Qualcomm says it was negotiating a chip deal with Meta when Arm notified Qualcomm in 2024 that it believed Qualcomm was in breach of its architecture agreement.

Qualcomm further alleges that Arm’s notification was leaked to the media.

According to Qualcomm’s argument in court, the disclosure created uncertainty around Qualcomm’s ability to continue using Arm’s architecture and affected Meta’s willingness to proceed with the proposed transaction.

Qualcomm says that by the time it eventually secured the Meta deal, its value had fallen by approximately $170 million.

That number is significant because it turns an abstract contractual disagreement into a specific damages claim.

Qualcomm’s lawyers argued that the disclosure caused commercial harm at a critical point in negotiations.

Arm has a very different interpretation.

The company argues that Meta’s decision-making was driven by a change in its own product strategy, particularly its shift away from virtual-reality headsets toward AI-powered glasses.

Under Arm’s argument, the Qualcomm licensing dispute did not cause the alleged commercial damage.

The jury will therefore have to consider competing explanations for what happened to the Meta deal.

Arm says Qualcomm’s losses were speculative

Arm’s defense is broader than simply denying the testing-tool allegation.

The company has argued that Qualcomm’s claimed losses were speculative and that its actions did not actually damage Qualcomm’s customer relationships.

That creates an important legal question.

Even if a court finds that a contractual obligation was breached, the party seeking damages generally still needs to establish that the breach caused the claimed financial loss.

Qualcomm therefore has to connect Arm’s conduct to the alleged $170 million reduction in the Meta transaction’s value.

Arm, meanwhile, has argued that other commercial factors were responsible.

The distinction could materially affect the size of any eventual judgment.

Qualcomm wants to stop paying Arm royalties

The most consequential element of the case may be Qualcomm’s requested remedy involving royalties.

Qualcomm is seeking the ability to stop paying royalties to Arm for up to five years.

Because Qualcomm is a major Arm customer and uses Arm technology across a substantial portion of its chip portfolio, the financial value of those royalty payments could reach billions of dollars.

However, that does not mean Qualcomm will automatically receive a five-year royalty suspension if it wins.

Judge Maryellen Noreika is considering whether that contractual remedy should remain available.

If the court rejects the five-year royalty provision, Qualcomm could instead be limited to a smaller damages award.

That makes the judge’s ruling on the remedy potentially as important as the jury’s determination over liability.

Why royalties matter so much to Arm

Arm’s business model is fundamentally tied to licensing.

Unlike Qualcomm, which generates substantial revenue from selling semiconductor products and related technologies, Arm primarily licenses intellectual property and collects royalties from chips incorporating its technology.

That makes major customers particularly important.

Arm disclosed in its filings that Qualcomm represented approximately 9% of Arm’s total revenue for the fiscal year ended March 31, 2026.

A prolonged disruption to that relationship would therefore have implications beyond the courtroom.

For Arm, Qualcomm represents a major source of licensing revenue.

For Qualcomm, meanwhile, Arm technology is embedded deeply into its product-development strategy.

The two companies therefore have strong economic incentives to maintain their commercial relationship even while fighting over its terms.

Qualcomm and Arm disagree over future royalty rates

The dispute is also about the economics of future Arm technology.

During the related bench-trial proceedings, Qualcomm CEO Cristiano Amon testified as Qualcomm challenged the way Arm is negotiating licensing terms for the next generation of its architecture.

Qualcomm’s lawyers highlighted a chart showing an alleged 1,800% increase in royalty rates between an earlier Arm architecture version and the newer version.

Arm’s legal team challenged Qualcomm’s position by arguing that older licensing economics may no longer make sense for today’s much more powerful processors.

The issue goes to the heart of the relationship.

Arm wants to monetize increasingly sophisticated technology as the chips built around its architecture become more capable.

Qualcomm, on the other hand, has an interest in maintaining predictable and economically sustainable licensing terms.

The disagreement is therefore not simply about a past contractual breach.

It is also about who captures the economic value created by the next generation of computing.

A 2013 agreement is now at the center of the economics

Reuters reported that Arm’s lawyers questioned Qualcomm CEO Cristiano Amon about a 2013 architecture licensing agreement.

According to the report, the agreement included a royalty structure that capped royalties at $1.88 per chip for chips with at least five CPU cores.

Arm’s legal team argued that such an arrangement was negotiated when chips were much smaller and less powerful than some of today’s processors.

The argument becomes particularly striking when comparing older smartphone-oriented chip designs with modern data-center processors.

Arm’s lawyer pointed to processors containing hundreds of CPU cores and questioned whether the older royalty structure effectively allowed Qualcomm to use additional cores without paying proportionally more.

Amon rejected that characterization.

The disagreement illustrates why the companies’ current dispute extends beyond individual products.

The fundamental question is how Arm’s intellectual property should be priced as computing moves from smartphones into increasingly powerful PCs, data centers and AI systems.

Qualcomm’s relationship with Arm has already survived one major trial

The current trial should not be confused with the earlier Arm v. Qualcomm/Nuvia case.

Arm sued Qualcomm in 2022 after Qualcomm acquired Nuvia, arguing that Nuvia’s Arm licenses could not simply be transferred or used in the manner Qualcomm intended.

The dispute eventually went to trial in December 2024.

The jury did not find Qualcomm in breach of the relevant Qualcomm architecture license agreement, while it failed to reach a complete verdict on one of the issues involving Nuvia.

In September 2025, Judge Noreika entered judgment in Qualcomm’s favor on the remaining Nuvia claim and rejected Arm’s request for a new trial. Qualcomm described the outcome as a complete victory.

Arm has appealed aspects of that earlier litigation.

The new lawsuit is therefore another chapter rather than a continuation of exactly the same claims.

Arm’s business has changed since the original dispute

The commercial relationship between the companies has also become more complicated since the earlier lawsuit began.

Arm has historically occupied the role of technology licensor.

Its CPU architectures are used by Qualcomm, Nvidia and many other semiconductor companies.

But Arm has increasingly moved toward competing more directly with some of its traditional customers.

The company has developed and promoted its own processor designs and has become more involved in markets such as data-center computing.

That creates an inherent tension.

Arm wants its customers to build products using its technology while also seeking a larger share of the value created by those products.

Its customers, meanwhile, have incentives to develop differentiated architectures and reduce their dependence on a single technology supplier.

Qualcomm is one of the clearest examples of that tension.

Qualcomm is also expanding beyond smartphones

Qualcomm was historically most closely associated with smartphone processors and wireless technology.

That is no longer the entire business.

The company has expanded into PCs, automotive, industrial computing, edge AI and data-center opportunities.

That expansion increases the importance of its CPU architecture strategy.

Qualcomm wants to compete in markets where processors can be significantly more powerful and more valuable than smartphone chips.

That makes the cost and terms of the underlying Arm license increasingly important.

If Arm can substantially raise royalty economics as Qualcomm enters higher-value markets, Qualcomm’s margins could face pressure.

If Qualcomm succeeds in locking in more favorable licensing terms, Arm could lose potential revenue from the same growth.

The litigation is therefore taking place against the backdrop of a much broader transformation in computing.

AI is raising the stakes for chip architecture

The growth of artificial intelligence makes the dispute even more strategically relevant.

AI infrastructure increasingly requires large amounts of computing power, and companies are investing heavily in CPUs, accelerators and custom silicon.

Arm has positioned its architecture across a broad range of computing markets.

Qualcomm is also attempting to extend its CPU technology beyond mobile devices.

The economics of licensing therefore become increasingly important as the size and value of chips increase.

A royalty model designed around smartphone processors may produce very different financial outcomes when applied to powerful PC or data-center chips.

That is one reason Arm’s argument about the age of Qualcomm’s existing licensing terms matters.

The companies are effectively negotiating over how the economics of Arm’s intellectual property should evolve as the semiconductor market changes.

The 2033 agreement provides a long runway

Despite the litigation, Qualcomm’s agreement with Arm runs through 2033, according to Reuters.

That means the current dispute is not simply about a short-term commercial relationship.

The outcome could influence negotiations for years.

If Qualcomm receives significant relief, it could strengthen its position in future licensing discussions.

If Arm prevails, the company could have greater leverage over royalty economics and the terms under which Qualcomm accesses future architecture.

Either result could influence negotiations between Arm and other large semiconductor companies.

The industry will therefore be watching the case closely even if it is not directly involved.

The case could influence Arm’s other customers

Arm licenses its technology to a broad ecosystem of semiconductor companies.

Qualcomm is one of its largest customers, but it is not the only major company dependent on Arm technology.

Nvidia, MediaTek and numerous other chip designers use Arm architectures in different products.

The outcome could influence how those companies evaluate future licensing agreements.

A ruling that strengthens Arm’s ability to adjust royalty economics could give the company greater leverage in negotiations.

A ruling that limits Arm’s ability to impose certain terms could encourage customers to push harder for contractual protections.

The consequences could therefore extend beyond Qualcomm.

The dispute also highlights a growing supplier-customer conflict

At a broader level, the Qualcomm-Arm dispute illustrates a recurring problem in technology markets.

Companies often begin as partners because one provides infrastructure and the other develops products around it.

As the market grows, however, the supplier may want a larger share of the value generated by the ecosystem.

The customer, meanwhile, wants to control costs and protect its ability to differentiate.

That can turn a mutually beneficial partnership into a strategic conflict.

Arm and Qualcomm are now an unusually clear example because both companies have become more ambitious about moving up the semiconductor value chain.

What happens during the five-day trial

The current proceedings combine a jury trial with a related bench trial.

The jury is examining Qualcomm’s allegations concerning Arm’s conduct, including the testing-tool dispute and the alleged impact of the license-termination disclosure.

Judge Noreika is separately handling questions surrounding the licensing relationship and whether Arm negotiated in good faith over future technology.

The five-day trial is therefore expected to address several interconnected issues rather than a single question of contractual liability.

The outcome could determine whether Qualcomm obtains substantial damages, whether it can seek relief from royalty payments and how the companies approach future licensing negotiations.

The financial risk is asymmetric

The potential consequences are not identical for the two companies.

For Qualcomm, a major loss could increase the cost of accessing Arm technology or create uncertainty around future products.

For Arm, however, a ruling that interrupts royalty payments from one of its largest customers could directly affect licensing revenue.

Arm’s disclosure that Qualcomm represented 9% of fiscal 2026 revenue provides a useful indication of the relationship’s financial significance.

That does not mean Arm would lose 9% of revenue if Qualcomm stopped paying royalties.

The actual impact would depend on the court’s ruling, the scope of any remedy and the companies’ subsequent negotiations.

It does demonstrate why Qualcomm remains an important commercial partner despite the litigation.

The bigger issue is control over Arm’s ecosystem

The most important question behind the case is arguably not the $170 million Meta deal or any individual testing tool.

It is who controls the economics of the Arm ecosystem.

Arm owns and licenses foundational intellectual property used by many of the world’s semiconductor companies.

Qualcomm is one of the companies that has built a large business on that foundation.

As chips become more valuable and move into new markets, Arm has a strong incentive to capture more licensing revenue.

Qualcomm has an equally strong incentive to prevent its underlying technology costs from rising faster than the value it can extract from its products.

That tension is unlikely to disappear even after the current trial ends.

The Bigger Picture

The Qualcomm-Arm dispute is becoming a test of how semiconductor licensing should work in an era when the same CPU architecture can power everything from smartphones to AI PCs and data-center processors.

The original licensing agreements were negotiated in a very different computing environment. Today, processors can contain dramatically more cores and serve much higher-value workloads, giving Arm a reason to revisit pricing while giving Qualcomm a reason to defend the economics of agreements it already has.

The case also demonstrates the strategic importance of intellectual property in the semiconductor industry. Unlike a conventional supplier dispute, the outcome could influence who captures billions of dollars from the expansion of computing.

For Arm, the stakes involve the value of its licensing model. For Qualcomm, they involve control over the cost structure underlying its next generation of processors.

Looking Ahead

The immediate question is whether Qualcomm can establish that Arm breached its contractual obligations and caused measurable commercial harm. Even if Qualcomm succeeds, Judge Noreika’s decision on the requested five-year royalty suspension will be critical in determining the financial size of the remedy. The jury and the court will also have to weigh competing explanations for the Meta transaction and the broader licensing dispute.

The longer-term issue will be the future relationship between the two companies. Qualcomm’s agreement with Arm runs through 2033, so the current litigation is unlikely to be the final confrontation over licensing economics. Whatever the result, the case could influence how Arm negotiates with other major chipmakers and how aggressively Qualcomm and its peers seek alternatives as semiconductor companies compete for more control over the technology stack.