Qualcomm signs deal to license Huawei patents for 5G, AI

Qualcomm, the American chip giant, has agreed to pay Huawei for patents, a reversal of the roles the two companies played when they last met over a licensing dispute.

According to reports released by Huawei on Monday, the companies entered into a multi-year, wide-ranging patent licence deal for 5G, computing, and AI technologies. The deal marks the first time that Qualcomm has licensed and purchased any patents from the company based in Shenzhen, which has never before entered into a licensing deal involving Qualcomm and 5G technology.

It is a cross-license deal, where each company licenses patents from the other, and Qualcomm purchases some US patents of Huawei in various technological fields, including computing and AI.

Huawei stressed that the transaction involves no other business cooperation. It remains subject to regulatory approvals, and no financial terms were disclosed.

Once completed, the agreement is expected to push the total value of Huawei's patent licensing deals above $6.9 billion. The company said its intellectual property licensing business has generated positive revenue since 2021.

That follows a licensing agreement with HP Inc, which Huawei announced in August.

Huawei's initial licensing fee to Qualcomm was paid in 2001, whereas its first licensing revenue came ten years later in the form of Motorola's licensing fee. In 2020, the two companies settled their disagreement by Huawei paying $1.8 billion in licensing fee arrears to Qualcomm.

Huawei has raised its research and development investment in recent times due to the US' trade prohibitions on it since 2019, which have reduced its access to advanced chips and critical software.

License revenue generation from an extensive patent library in telecommunications, audio, and video is a way to recoup that investment.