A cloud computing startup called Xockets is suing Nvidia and Microsoft for allegedly infringing on its patents and engaging in a purchasing cartel. According to the company, Nvidia was notified of the infringement more than two years ago but chose to move forward.
The patent infringement concerns data processing unit (DPU) technology, which helps with the efficiency of cloud infrastructure.
Startup is suing partner companies in the AI market (Image made with Dall-E/Tamires Ferreira/Olhar Digital)
Nvidia allegedly infringed on startup’s patent
DPUs are essential in semiconductor chips that power artificial intelligence (AI), an area of interest to both Nvidia and Microsoft. Texas-based Xockets is accusing the chip company of infringing on its patent for the technology.
The infringement was actually from the company Mellanox, acquired by Nvidia in 2020. The lawsuit alleges that Mellanox violated the patent after the startup publicly demonstrated the DPU technology at an event in 2015. In addition to having inherited the alleged infringement, Nvidia currently has three DPUs based on the “stolen” technology, the BlueField, ConnectX and NVLink Switch.
It wasn’t for lack of warning: Xockets claims the chip company was informed of this in February 2022. Now, the startup accuses Nvidia of a strategy called “efficient infringement,” in which, essentially, the infringement is committed first and the legal consequences are dealt with later.
Xockets patent was allegedly violated in 2015 and the infringement was inherited by Nvidia (Image: Xockets)
Microsoft is also accused of patent infringement. According to the lawsuit, as a customer of the chip company, the tech giant has “privileged access to Nvidia’s GPU-enabled server computer systems and AI components.”
Nvidia and Microsoft reportedly involved in purchasing cartel
Another accusation alleges that Nvidia is monopolizing the market for GPU servers for AI and, together with Microsoft, participates in a cartel for purchasing intellectual property and equipment through an organization called RPX.
According to The Verge, Xockets says that the organization was formed so that companies could control market prices and boycott other competitors. The startup would be one of those affected. This would have created a monopoly in the generative artificial intelligence sector.
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What the startup wants
Xockets is seeking damages for the alleged accusation; The startup is also asking the court in charge to order Nvidia and Microsoft to stop violating patents and antitrust laws, which prevent companies in the same sector from agreeing to control prices; The intellectual property lawyer, investor and member of Xockets’ board, Robert Core, told the US website that he believes that, even going against two of the largest companies in the country, the startup has enough resources to fight; Nvidia declined to comment. Microsoft and RPX did not respond to the website’s requests for comment.
