In a bold move against tech giants Nvidia and Microsoft, a startup funded by the cofounder of Yahoo and CTO of Intel, Xockets, has filed a lawsuit alleging patent infringement in the realm of AI chips. The lawsuit claims that Nvidia and Microsoft were part of a buying cartel that aimed to artificially fix lower prices for technology, in addition to infringing on Xockets’ patented data processing unit (DPU) technology.
Xockets’ Allegations
Xockets asserts that Nvidia has infringed on its patented DPU technology, which is designed to enhance cloud infrastructure efficiency by accelerating data-intensive workloads. The startup claims that Nvidia inherited the infringement through its acquisition of Mellanox in 2020. Xockets alleges that three of Nvidia’s DPUs, namely BlueField, ConnectX, and NVLink Switch, are based on its patented technology. Furthermore, Xockets accuses Microsoft of infringing on its patents, claiming that as an Nvidia customer, Microsoft has privileged access to the infringing GPU-enabled server systems and components.
According to the lawsuit, Xockets has made Nvidia aware of the alleged infringement, with the startup’s founder and board member, Parin Dalal, bringing up the issue to Nvidia’s DPU business VP in February 2022. Xockets accuses Nvidia of engaging in “efficient infringement,” a strategy that entails infringing on patents and letting lawyers address the legal consequences later. Moreover, Xockets accuses Nvidia of monopolizing the market for GPU servers for AI and participating in a buying cartel with Microsoft through an organization called RPX.
Xockets is seeking damages for the alleged infringement and is requesting the court to order the companies to cease violating its patents and antitrust laws. Despite facing two tech giants, Xockets investor and board member Robert Cote, an IP lawyer, expressed confidence in the startup’s ability to challenge Nvidia and Microsoft. Dalal, who currently works at Google as a principal engineer of machine learning and AI, does not seem to involve Google in the ongoing litigation.
The lawsuit filed by Xockets against Nvidia and Microsoft sheds light on the contentious landscape of technology patent disputes. The allegations of patent infringement, monopolization, and participation in a buying cartel raise significant legal and ethical questions surrounding competition in the tech industry. As the legal battle unfolds, it remains to be seen how Nvidia and Microsoft will respond to Xockets’ claims and how the court will adjudicate the complex issues at stake.
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