Qualcomm, once raking in patent royalties from around the world, now has to pay Huawei for its patents.
Although the two companies have signed a cross-licensing agreement, the most striking detail is that Qualcomm will fund the acquisition of Huawei’s computing, AI, and networking patents in the United States. Look at the direction things are moving: Qualcomm is spending real money to buy Huawei’s technology assets.
In the past, Qualcomm could sit back and collect its “Qualcomm tax” simply by holding onto its patent portfolio. But now, in critical areas like AI and computing, it has no choice but to buy patents from its strongest rival to shore up its defenses—and even this deal depends on the approval of U.S. regulators.
The balance of power has completely reversed. When a giant that once collected monopoly rents becomes the buyer, the moat behind Qualcomm’s lofty valuation is already beginning to crumble.
#QCOM
Although the two companies have signed a cross-licensing agreement, the most striking detail is that Qualcomm will fund the acquisition of Huawei’s computing, AI, and networking patents in the United States. Look at the direction things are moving: Qualcomm is spending real money to buy Huawei’s technology assets.
In the past, Qualcomm could sit back and collect its “Qualcomm tax” simply by holding onto its patent portfolio. But now, in critical areas like AI and computing, it has no choice but to buy patents from its strongest rival to shore up its defenses—and even this deal depends on the approval of U.S. regulators.
The balance of power has completely reversed. When a giant that once collected monopoly rents becomes the buyer, the moat behind Qualcomm’s lofty valuation is already beginning to crumble.
#QCOM
