AT&T sues Broadcom over 'bullying' VMware contracts

AT&T sues Broadcom, accusing the chip manufacturer in attempting to disrupt the VMware contracts for a telecommunications company, which jeopardizes first responders and government systems.

Recently, Broadcom bought VMware for $61 billion, which was followed by a dramatic reduction of VMware product offers – from 8,000 titles to four packages and introduced subscription-based licensing.

Many VMware clients, including, AT&T, had VMware perpetual licenses. Meanwhile, Broadcom's contractual obligation to provide support services to AT&T runs through Sept. 8.

According to AT&T, "Under an amendment signed by the parties in August 2022, it was granted the right to extend support services for up to two additional years at its 'sole option.'" Broadcom, however, denies the company this right.

AT&T itself is not against the changes in the VMware software policy, but doesn’t agree that they should modify the existing contracts retrospectively.

AT&T is not going to purchase new software licenses and subscriptions for several hundreds of millions of dollars, so, in case they won’t come to an agreement with Broadcom, their VMware software on 8600 machines will end up without any support, which may have grave consequence for numerous AT&T clients, including public safety agencies (including first responders), the U.S. government, and the Office of the President.

Nevertheless, Broadcom itself doesn’t agree with the accusations and thinks it will win the lawsuit.