A two-year legal dispute between two tech titans threatens to destabilize the rising wave of new personal computers driven by artificial intelligence, according to tech industry executives and academics.
Executives from Microsoft (MSFT.O), Asus (2357.TW), Acer (2353.TW), and others have joined Qualcomm (QCOM.O). CEO Cristiano Amon was on stage last week at Taipei’s annual Computex trade exhibition, pitching a new generation of AI-powered PCs.
But the chatter in corridors, over dinner, and over drinks at the show was about how a contract disagreement between Arm Holdings and Qualcomm, which work together to build the processors that power these new laptops, might quickly block the arrival of new PCs that are due to make Microsoft and its partners billions of dollars.
Rough estimations indicate that Microsoft hopes to capture around 5% of the market with Arm-based laptops by the end of the year, selling between 1 million and 2 million machines.
Nearly two dozen versions from Microsoft, Dell (DELL.N), and Samsung (005930.KS) are anticipated to arrive to consumers on June 18.
Arm’s success in the case might compel Qualcomm and its roughly 20 partners, including Microsoft, to suspend delivery of the new laptops.
“It’s definitely a real risk,” said Doug O’Laughlin, founder of the chip financial analysis business Fabricated Knowledge. “The more successful (the laptops are), the more fees Arm can get eventually.”
The British business, which is majority-owned by Japan’s SoftBank Group (9984.T), filed a lawsuit against Qualcomm in 2022 for failing to negotiate a new license following the acquisition of a new company. The lawsuit hinges around technology that Qualcomm, a mobile chip manufacturer, bought from Nuvia, a company formed by Apple chip experts and purchased in 2021 for $1.4 billion.
Arm creates intellectual property and designs that it sells to firms like Apple (AAPL.O) and Qualcomm, which manufacture processors. Nuvia intended to create server chips based on Arm licensing, however when the deal completed, Qualcomm moved its remaining team to develop a laptop CPU, which is presently utilized in Microsoft’s
latest AI PC, called Copilot+.
