Huawei licenses 5G and AI patents to Qualcomm, which becomes net payer pending US approval

Huawei said on 5 October 2026 that it had concluded a multi-year patent agreement with Qualcomm covering fifth-generation mobile and artificial-intelligence technologies. The South China Morning Post, reporting the Chinese company's account the same day, said the cross-licence also includes Qualcomm's purchase of specific Huawei patents held in the United States across compute, AI and networking. Nikkei Asia reported on 6 October that the arrangement would make Qualcomm the net payer in the relationship for the first time since Huawei began licensing Qualcomm patents in 2001, and that the licensing arrangement will require US regulatory approval. That last clause is the whole story. Huawei has been on the Commerce Department's Entity List since May 2019, and in September its criminal trial opened in Brooklyn. The flow of royalties and patent title now runs towards a company American policy is built to isolate.

What the two companies have put on the record

The disclosure came from Huawei rather than from a joint filing. Neither the South China Morning Post nor the Nikkei Asia account carried a price for the purchased patents, a royalty rate, or the term of the licence beyond its description as multi-year. The reported structure has two legs: a mutual licence over standard-essential and implementation patents in 5G and AI, and an outright assignment to Qualcomm of a defined set of Huawei's US patents in compute, AI and networking. The second leg is a transfer of American-registered property from a Chinese holder to a US buyer. The first leg runs in both directions, and it is the direction towards Huawei that carries the regulatory weight.

Huawei's own numbers explain why it is now a seller of rights rather than a buyer. Its 2025 annual report puts revenue at 880.941 billion yuan, or about 126.018 billion dollars, with research and development spending of 192.3 billion yuan, equal to 21.8 per cent of revenue. The company says it employs around 114,000 research staff, 53.7 per cent of its workforce, holds roughly 165,000 granted patents worldwide, and has spent more than 1.382 trillion yuan on research over the past decade. Qualcomm's position is the mirror image. Its fiscal 2025 annual report records revenues of 44.3 billion dollars, up 14 per cent on 39.0 billion, with licensing revenues of 5,582 million dollars, essentially flat against 5,572 million the year before.

The instrument that decides it

The constraint is the Entity List entry published in the Federal Register on 21 May 2019 and effective 16 May 2019. It added Huawei Technologies and 68 non-US affiliates across 26 countries, imposed a licence requirement for all items subject to the Export Administration Regulations, set the licence review policy at a presumption of denial, and made no licence exceptions available for exports, re-exports or in-country transfers to the listed parties. The justification recorded in the rule was that there was reasonable cause to believe Huawei had engaged in activities contrary to US national security or foreign policy interests, citing a 13-count indictment including sanctions violations relating to Iran.

The reach of that listing is wider than hardware. Items subject to the EAR include technology and software, not only finished chips, so a licence that releases Qualcomm's controlled technology to Huawei engages the same requirement that stops a shipment of processors. Qualcomm has already been on the receiving end of it: its fiscal 2025 report states that in May 2024 the Commerce Department revoked the export licence under which it had previously sold 4G and certain other integrated-circuit products to Huawei, and that the company does not expect further product revenues from Huawei. A patent deal is not a sale of chips, but the authorisation it needs comes from the same place.

A control regime that has been widening, not relaxing

Nothing in the past year suggests a loosening. Al Jazeera reported on 1 June 2026 that the Bureau of Industry and Security had issued guidance confirming that licence requirements for advanced AI chips apply to subsidiaries of Chinese companies located outside China, covering firms with headquarters or a parent company in China, with Nvidia, AMD, Intel and TSMC named among the suppliers affected. That guidance closed a routing gap rather than opening a channel. On enforcement, Nikkei Asia reported that Huawei's criminal trial began on 9 September 2026 in Brooklyn federal court, nearly eight years after the original charges, with the company denying both trade-secret theft and Iran sanctions violations.

Set against that, an approval would be a narrow but legible concession: it would treat intellectual property as a tradable category even where goods are denied, and it would let a listed company convert research spending into dollar income from an American buyer. A refusal would do the opposite work, extending the logic of the Entity List from the movement of items to the ownership of rights. Either way the decision is not Qualcomm's to make, and as of 7 October 2026 no determination had been reported.

What to watch

Three things carry the outcome. The first is whether any authorisation is granted at all, and on what conditions; the presumption of denial in the 2019 rule means silence is the default answer rather than an interim one. The second is the treatment of the assignment leg, since the purchase of Huawei's US patents raises questions of ownership and valuation that export licensing was not designed to answer. The third is the trial in Brooklyn, which sets the political temperature in which any licence decision is taken. Huawei's reported announcement is, for now, a commercial agreement with a regulatory condition attached, and the condition is held by the agency that revoked Qualcomm's last licence to deal with the company.

Sources

• South China Morning Post — Huawei, Qualcomm strike multi-year patent agreement across 5G, AI
• Nikkei Asia — Qualcomm to pay Huawei for first time in 5G, AI patent breakthrough
• Federal Register — Addition of Entities to the Entity List, 21 May 2019 (effective 16 May 2019)
• Qualcomm Incorporated — Annual Report on Form 10-K for fiscal 2025, filed with the SEC
• Huawei — 2025 Annual Report
• Nikkei Asia — Huawei denies stealing secrets, violating Iran sanctions as US trial begins
• Al Jazeera — US says ban on AI chip shipments applies to Chinese firms outside China