Broadcom this morning said it would “create a new $1.5 billion fund with a focus on innovation to train and educate the next generation of engineers in the U.S.” as part of its efforts to convince regulators and investors that it should acquire Qualcomm. Broadcom’s pledge came just hours after the U.S. government issued a stern warning that a Broadcom purchase of Qualcomm could “result in the weakening of Qualcomm’s position in maintaining its long-term technological competitiveness.”
Separately, the Wall Street Journal reported that Qualcomm is nearing a patent-licensing agreement with Huawei—a revelation that adds further complexity to an already contentious and convoluted situation.
“Broadcom acquires companies to focus resources and strengthen leadership in their core franchises. In the case of Qualcomm, this will be 5G cellular,” Broadcom said in a statement promising the $1.5 billion fund. “Broadcom has a proven track record of managing R&D for maximum impact and investing in core franchises. Broadcom will not only maintain the R&D resources Qualcomm devotes to 5G and innovation in future wireless standards—we will also focus R&D spend to those critical technologies that are essential to the U.S.”
In its release, Broadcom also sought to highlight its patriotism. “Broadcom is in every important respect an American company,” the company argued.
That statement is a clear rebuttal to the lengthy letter the U.S. Treasury Department released announcing that its Committee on Foreign Investment in the U.S. (CFIUS) will review Broadcom’s proposed $117 billion hostile takeover of Qualcomm.
“CFIUS, during the investigation period, will continue to assess the likelihood that acquisition of Qualcomm by Broadcom could result in changes that affect the security and integrity of supply of goods and services to the U.S. government in a manner that is detrimental to U.S. national security,” the letter said.
Apart from that ongoing battle, the WSJ reported that a Qualcomm patent agreement with China’s Huawei could be announced within weeks—though neither company commented on the report. As the publication noted, that agreement would likely result in significant revenues from Huawei to Qualcomm, which would put the company in a better position as it heads toward a shareholder meeting that is scheduled to vote on a Broadcom takeover of Qualcomm’s board.
Broadcom launched its bid to take over Qualcomm late last year in a transaction that, if consummated, would be the tech industry’s largest ever. Qualcomm, for its part, has largely resisted the effort, though in recent weeks the company has held several meetings with Broadcom officials.