Broadcom pledges $1.5B innovation fund to reassure regulators

Broadcom pledges $1.5B innovation fund to reassure regulators
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Broadcom, the Singapore-based tech firm that has been aggressively trying to take over Qualcomm, is promising to start a new $1.5 billion U.S. innovation fund amid a federal investigation into the national security implications of its bid for the U.S. chip manufacturer.

The announcement comes a day after the U.S. put the hostile takeover on hold, saying that Broadcom could jeopardize national security by threatening Qualcomm’s technological leadership.

The Committee on Foreign Investment in the U.S. (CFIUS) said in a letter to Qualcomm’s attorneys on Monday that it was worried Broadcom would cut back on Qualcomm’s investment in emerging technologies like 5G components in favor of short-term projects, thus opening the door for foreign firms to take the lead.

On Wednesday, Broadcom tried to assure regulators that it is emphasizing investments in research and development.

“Broadcom has a proven track record of managing R&D for maximum impact and investing in core franchises,” the company said in its announcement. “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.”

A Qualcomm spokesperson was not immediately available for comment.

Qualcomm agreed to put its annual shareholder meeting on hold this week to allow the CFIUS to conduct an investigation into Broadcom’s efforts.