A Texas-based startup, Xockets, is taking legal action against tech giants Nvidia and Microsoft, alleging that they have infringed upon its patented artificial intelligence chip technology. The company claims that both corporations are involved in an effort to manipulate the pricing of this technology through a procurement alliance.
In a recent lawsuit, Xockets asserts that Nvidia has violated its patent for Data Processing Unit (DPU) technology, which is designed to enhance cloud infrastructure by accelerating data-intensive workloads. Xockets contends that Nvidia inherited these infringement actions when it acquired Mellanox in 2020, claiming that Mellanox initially violated their patents after Xockets showcased its DPU technology at a conference in 2015.
The startup argues that Nvidia’s products, including its BlueField, ConnectX, and NVLink Switch DPUs, are all based on Xockets’ patented technology. Additionally, Xockets claims Microsoft has also infringed on its patents by accessing Nvidia’s GPU servers and AI components as a customer.
Xockets has informed Nvidia of the alleged infringement, highlighting that the company’s founder and board member, Parin Dalal, raised the issue with Nvidia’s VP of DPU business in February 2022. Xockets accuses Nvidia of employing a strategy of “efficient infringement,” suggesting that the company plans to continue infringing and resolve any legal issues later.
Moreover, Xockets alleges that Nvidia has monopolized the AI GPU server market and has formed a procurement alliance known as RPX with Microsoft. This alliance, as Xockets describes, was created at the request of large tech companies to facilitate a knowledge purchasing coalition.
The startup claims that RPX is enabling members like Nvidia and Microsoft to collectively suppress innovative products such as those from Xockets to lower prices, rather than negotiating individually. According to Xockets, this procurement alliance allows Microsoft and Nvidia to monopolize the generation of AI supported by GPUs by controlling access to the essential equipment and platforms.
Xockets is seeking damages for the alleged patent infringement and is demanding that the court order both companies to cease their violations of patent and antitrust laws. Despite the significant competition posed by two of the largest companies in America, Robert Cote, a board member and intellectual property attorney for Xockets, expressed confidence to The Verge that the startup has ample resources to take on these corporate giants.
Dalal, who currently works at Google as a principal engineer focusing on machine learning and AI, does not appear to have a formal role in the lawsuit. Cote refrained from commenting on Google’s involvement. Nvidia and Google declined to comment, while Microsoft and RPX did not provide immediate responses.
