Qualcomm and Arm Holdings returned to a Delaware federal court for a five-day jury trial on Monday, October 5, 2026, as Qualcomm seeks to halt royalty payments for up to five years and accuses Arm of withholding critical testing tools and leaking a 2024 contract threat that damaged chip deal negotiations with Meta Platforms.
Federal Court Battle Over Billions in Royalties and Meta Deal Fallout
The courtroom showdown in Wilmington, Delaware, marks another chapter in the contentious relationship between two chip giants. Qualcomm, one of Arm’s largest customers, alleges that Arm withheld mandatory chip-testing tools owed under their contract and intentionally undermined business negotiations by leaking a 2024 termination threat to the press. According to court arguments, that disclosure of a license breach notification to Bloomberg News rattled Meta Platforms just as Qualcomm was finalizing a major supply agreement.
Qualcomm attorney Karen Dunn told the jury that by the time Qualcomm managed to salvage the agreement, the value of the deal had decreased by $170 million due to the disruption and delay. Delay is costly,
she told the jury, adding that the case is very serious because Qualcomm’s entire chip business depends on Arm honoring its contractual promises.
“It’s really bad because Qualcomm’s entire chip business depends on Arm and on Arm honoring its contract and honoring its promises,”
Karen Dunn, Qualcomm attorney
In the lawsuit, Qualcomm is attempting to halt its royalty payments to Arm for up to five years, a remedy that could be worth billions of dollars. However, U.S. District Judge Maryellen Noreika is weighing whether to strike that specific contractual remedy, a move that would limit the damages Qualcomm can pursue.
Arm Rejects Damage Claims and Cites Shift in Virtual Reality Strategy
Arm strongly denies the breach-of-contract allegations and contends that Qualcomm’s claimed financial harm is entirely speculative. Representing Arm, attorney Gregg LoCascio told the jury that Meta shifted its focus away from virtual reality headsets toward AI smart glasses, which naturally altered the financial terms of the chip arrangements rather than any leaked correspondence from Arm.
“They were not harmed in the least,”
Gregg LoCascio, Arm attorney
Arm further argued that Qualcomm should be barred from seeking damages over the leaked termination letter because Qualcomm itself had previously shared confidential details concerning antitrust investigations involving Arm with reporters.
Judge Noreika Examines Arm Licensing Negotiations
Running concurrently with the five-day jury trial is a separate bench trial overseen by Judge Noreika. This proceeding examines whether Arm fulfilled its legal obligation to negotiate in good faith regarding the next generation of its chip architecture. Qualcomm’s master licensing agreement with Arm runs through 2033.
During the bench trial testimony, Qualcomm CEO Cristiano Amon took the stand, where attorneys reviewed a chart indicating that Arm was seeking an increase of 18,500 per cent in royalty payments between version 9 and version 10 of its computing architecture. Arm countered by pressing Amon on whether Qualcomm was simply trying to exploit outdated pricing terms established in a 2013 licensing deal.
Arm’s legal team pointed out that the 2013 agreement caps royalties at $1.88 per chip for processors with five or more central processing cores. In modern data center silicon featuring up to 288 cores, Arm argued that the old structure leaves Qualcomm paying for only five cores while “getting 283 for free.” Amon responded directly to the questioning, stating that I don’t see it that way.
Commercial Stakes and Past Legal Battles Between the Chip Rivals
The current legal friction highlights a broader commercial shift. Arm, traditionally a behind-the-scenes supplier of chip designs to firms such as Qualcomm and Nvidia, has increasingly moved to sell its own branded chips, turning former customers into direct competitors in the artificial intelligence and data center markets, as noted by Stocktwits. Qualcomm accounted for 9% of Arm’s total revenue in the fiscal year ended March 31, 2026.
Arm disclosed the litigation details in its quarterly financial filings, noting that Qualcomm originally filed the complaint in April 2024, followed by amendments in 2025 and March 2026. Qualcomm stated in its filings that it has not recorded any financial reserves for potential losses from the case, as a negative outcome is not considered probable.
This jury trial follows an earlier legal conflict initiated when Arm sued Qualcomm in 2022 over license agreements tied to Qualcomm’s acquisition of chip startup Nuvia. While a federal jury ruled largely in Qualcomm’s favor in December 2024—a verdict upheld by a federal court in September 2025—that case remains on appeal at the United States Court of Appeals for the Third Circuit.