What you need to know

• A Delaware jury sided with Qualcomm this week, finding Arm guilty of breaching a licensing agreement and "interfering" with business relations.
• Qualcomm was awarded $1 in damages for each offense, but the shouting will continue: the companies will likely find themselves in court over royalty payments.
• This started over Qualcomm's allegations that Arm "violated its contract" after its 2021 acquisition of Nuvia.

Qualcomm's court case with Arm was settled this week, and the former came out the victor ... in a way.

Reuters reported this week that a recent court case between Qualcomm and Arm over an alleged licensing breach has been settled. A Delaware jury found Arm guilty of the breach and of "interfering" with Qualcomm's business relationships, and as a result, Qualcomm was awarded $2 in damages — $1 for each offense.

While the jury officially sided with Qualcomm, Arm saw it differently. In a statement, the company said "the jury’s verdict confirms that Arm operated in ​good faith under its technology license agreement and its award of only two dollars confirms the merit of Arm’s arguments in the ‌case."

This likely won't be the end of Qualcomm and Arm's court dates. According to Reuters, Qualcomm has more to bring up, which it will likely do in court with Judge Maryellen Noreika. Since Arm neglected its responsibilities of providing the necessary tools for its chips, Judge Noreika could rule that Qualcomm can "stop paying royalties to Arm for five years." This is something Qualcomm has been after since this dispute began.

So far, Arm is against such a ruling. It remains to be seen what will happen.

Qualcomm's allegations

Qualcomm and Arm's court case began in early October. The former wants to freeze royalty payments for up to five years, a ruling Judge Noreika will have to decide in the future. But it all started after Qualcomm’s 2021 acquisition of the chip startup Nuvia. As stated before, Qualcomm alleged Arm "violated its contract" by withholding its chip-testing tools.

Beyond this were Qualcomm's business relationships. The company claimed Arm "leaked its threat to end a key license in 2024." This reportedly hurt Qualcomm's potential chip deal with Meta that year. Qualcomm said this leak dropped $170 million off its deal with Meta. Arm denied that it was linked to any of this. Instead, Meta's change of heart from VR headsets to AI glasses was the real reason, the company claimed.

There's still a concern that the fallout of these cases could impact future phone prices. Price negotiations and control over CPU technology could be hit the hardest.

What you need to know

• Qualcomm and Arm are engaged in a five-day jury trial in a Delaware federal court.
• The conflict stems from Qualcomm’s 2021 acquisition of the chip startup Nuvia. Qualcomm alleges Arm subsequently violated its contract by withholding mandatory chip-testing tools.
• Qualcomm is seeking to halt its royalty payments to Arm for up to five years.
• A secondary bench trial is investigating whether Arm negotiated its next-generation architecture in good faith. The two companies are currently locked into a contract through 2033.

The stakes in the smartphone sphere have just gotten a billion dollars higher. Qualcomm and Arm are back in a Delaware federal court this week for a five-day jury trial that threatens to upend how the chips that power your phone are licensed and built.

Reuters reports that Qualcomm is battling to halt its royalty payments to Arm for as long as five years, a huge financial blow for the chipmaker, which makes up about 9% of Arm’s fiscal 2026 revenue based on market research firm Intellectia's figures.

The heart of the disagreement is Qualcomm's 2021 acquisition of chip startup Nuvia, which had its Arm license. Qualcomm said Arm declined to provide the tools necessary to test chips, as required in its contract. Qualcomm also said Arm leaked its threat to end a key license in 2024, which hurt talks on a potential chip deal with Meta.

The dispute with Meta could serve as one of the trial’s most concrete measures of damages. Qualcomm says the leak helped knock $170 million off the eventual value of its Meta deal. Arm denies that link, saying the economics of the deal changed because Meta shifted away from virtual reality headsets to AI glasses.

The fight over royalty is even bigger. Qualcomm wants to avoid paying Arm for as long as five years, risking billions of dollars of royalties. Judge Maryellen Noreika is considering whether that five-year provision should stand, which could dramatically affect how much Qualcomm can collect.

Qualcomm says Arm undercut its business after the Nuvia deal, and Arm says the suit is just leverage in a business dispute and Qualcomm can’t prove it was damaged.

Another bench trial is investigating whether Arm negotiated in good faith over its next-generation architecture. They are currently under contract through 2033.

The five-day trial may end up deciding a lot more than one royalty bill. It could also change the way Arm and the biggest chipmakers negotiate the price and control of future CPU technology.