Qualcomm will pay Huawei to license its patents for the first time in historic turnaround

Qualcomm announced a multi-year cross-licensing agreement with Huawei that marks a significant reversal in their 25-year history of patent licensing. For the first time, Qualcomm will pay Huawei for patent rights, covering not only 5G and AI technologies but also compute and networking patents. This agreement, which requires regulatory approval, involves Huawei purchasing some of Qualcomm's U.S. patents outright. The deal follows a resolved back royalty dispute in 2020 and the expiration of Huawei's license by early 2025.

This historic turnaround comes after Qualcomm stopped counting royalties from Huawei in its revenue in early 2025 and Huawei halted royalty payments to Qualcomm in 2018. The agreement highlights both companies' commitment to intellectual property rights and licensing consistent with FRAND principles. It does not involve any other business cooperation, such as chip sales, between the two companies.

Huawei's patent purchase under this agreement covers a range of technologies, though the exact number and value are undisclosed. The deal is expected to boost Huawei's total patent-licensing contracts value to over $6.9 billion, according to the announcement. Since 2021, Huawei's licensing business has brought in more revenue than it pays for other firms' patents. Huawei has also signed a multi-year Wi-Fi patent cross-license with HP and holds 165,000 active granted patents worldwide.

Despite this new agreement, Huawei's relationship with Qualcomm remains unchanged, with no timetable set for closing the patent purchase. The company's fiscal year ended before the announcement, so it will not affect Qualcomm's Q4 report. Nonetheless, this development suggests that Qualcomm is now the entity paying, marking a shift in their 25-year history of patent licensing.