Fidelity Investments and Broadcom just ended a high-stakes legal battle that threatened to disrupt the financial lives of millions. Fidelity filed a lawsuit accusing Broadcom of bullying tactics, claiming the tech giant threatened to cut off access to software at the very heart of the firm’s trading systems.
The two companies settled on Friday. As a result, Fidelity voluntarily dropped its lawsuit in a Massachusetts court. A spokesperson for Fidelity confirmed the good news, stating that Broadcom will continue its services without any interruptions. This means customers, employees, and business partners won’t experience any technical meltdowns Fidelity previously feared.
The roots of this fight go back to 2005. For nearly two decades, Fidelity relied on VMware’s “virtualization” software to manage its massive network of servers. However, things changed when Broadcom bought VMware in 2023. After the takeover, Broadcom overhauled its product sales. Fidelity claimed Broadcom refused to honor its existing contract and tried to force the firm to buy “expensive” software bundles instead of just the tools it actually needed.
For a firm like Fidelity, which manages $17.5 trillion in assets, the stakes couldn’t have been higher. In its legal filings, the company warned that losing access to that specific software would cause “business-critical” failures. They predicted widespread outages across their platforms, leaving 50 million customers unable to log into their accounts or execute trades. It would have also paralyzed internal systems for Fidelity’s own employees.
With the settlement, Fidelity secured an agreement that keeps its systems running on the VMware software for now. The deal arrived just in time, as a judge was scheduled to hear arguments next week on whether to legally block Broadcom from pulling the plug. For now, the “uninterrupted” service agreement allows both giants to move past the courtroom drama and get back to business.
