China — Huawei Technologies and US chipmaker Qualcomm have agreed to a broad multi-year patent licensing arrangement covering artificial intelligence, 5G, computing and networking technologies.
Huawei announced the agreement Monday, describing it as its first patent licensing deal with Qualcomm to include 5G technologies.
Under the arrangement, Qualcomm will also purchase certain US patents owned by Huawei covering computing, artificial intelligence and networking, Huawei said.
The Chinese technology company expects the transaction to bring the total value of its patent licensing agreements to more than $6.9 billion once it is completed.
The agreement highlights the growing commercial role of intellectual property for technology companies competing in major global markets. Patents covering communications, computing and artificial intelligence can provide licensing revenue even as companies face restrictions affecting other areas of their technology operations.
Huawei said its intellectual-property licensing business has generated positive revenue since 2021, reflecting years of investment in research and development.
The company’s intellectual-property strategy has taken on greater importance since US trade restrictions introduced in 2019 limited Huawei’s access to advanced chips and critical software.
Those restrictions have encouraged Huawei to expand its own technological capabilities while placing greater emphasis on generating revenue from intellectual property developed through its research programs.
Huawei and Qualcomm have maintained a relationship for many years. Huawei made its first licensing payment to Qualcomm in 2001, while it received its first licensing income from Motorola in 2011.
The latest agreement comes after Huawei announced another patent licensing arrangement with HP Inc in August.
For Qualcomm, the deal provides access to relevant Huawei intellectual property while continuing a commercial relationship between two major companies in the global telecommunications and computing industries.
For Huawei, the agreement creates another source of licensing revenue as restrictions on access to advanced foreign technology continue to shape its operating environment.
The technologies included in the agreement are among the major areas of competition across the global technology industry. Artificial intelligence, 5G, computing and networking support a broad range of products and services, making ownership and licensing of patents in these fields strategically important.
The deal also shows that commercial intellectual-property arrangements can continue to develop between major companies despite broader technology tensions between the United States and China.
Huawei’s expectation that the agreement will take its cumulative patent licensing agreements beyond $6.9 billion further reflects the scale of its intellectual-property portfolio and the financial importance of licensing to the company.
The transaction is significant for both Huawei and Qualcomm and reflects the continuing role of patent ownership and licensing as sources of revenue and competitive advantage across the technology industry.
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