In a surprising turn of events, a Texas-based startup called Xockets has filed a lawsuit against tech giants Nvidia and Microsoft. The startup, which was funded by the cofounder of Yahoo and CTO of Intel, is accusing Nvidia and Microsoft of infringing on its patented data processing unit (DPU) technology. Xockets claims that Nvidia inherited the infringement through its acquisition of Mellanox in 2020, as Mellanox allegedly infringed on Xockets’ patent after a public demonstration of its DPU tech in 2015.
Xockets alleges that three of Nvidia’s DPUs – BlueField, ConnectX, and NVLink Switch – are based on its patented technology. The startup also accuses Nvidia of pursuing a strategy of “efficient infringement,” where the company knowingly infringes on patents and leaves it up to lawyers to handle the legal consequences later. Furthermore, Xockets claims that Nvidia is monopolizing the market for GPU servers for AI, thereby stifling competition and innovation.
In addition to Nvidia, Xockets is also targeting Microsoft in its lawsuit. The startup alleges that Microsoft, as a customer of Nvidia, has “privileged access to NVIDIA’s infringing GPU-enabled server computer systems and components for AI.” Xockets claims that Microsoft is participating in a buying cartel with Nvidia through an organization called RPX, which was supposedly created to enable and create buyers’ cartels for intellectual property. Through this alleged cartel, Xockets claims that Microsoft and Nvidia are able to control the market for GPU-enabled generative artificial intelligence, thereby limiting access to innovative technologies.
Xockets is seeking damages for the alleged infringement and is asking the court to order Nvidia and Microsoft to stop violating its patents and antitrust laws. Despite facing two of the largest companies in the tech industry, Xockets investor and board member Robert Cote is confident in the startup’s ability to take on these giants. He believes that Xockets has “more than enough wherewithal to take on Goliath.”
It is worth noting that Xockets’ founder and board member, Parin Dalal, currently works at Google as a principal engineer of machine learning and AI. Despite his affiliation with Google, the company does not seem to have an official role in the ongoing litigation between Xockets, Nvidia, and Microsoft.
The lawsuit filed by Xockets against Nvidia and Microsoft highlights the ongoing battle for innovation in the AI industry. The allegations of patent infringement, antitrust violations, and monopolistic practices shed light on the complex dynamics at play in the tech sector. Only time will tell how this legal battle will unfold and what implications it may have for the future of AI technology.
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