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Two of the undoubted leaders of the generative artificial intelligence boom are being accused by a startup of monopolistic practices, patent infringement, and violating federal antitrust laws.
Texas-based Xockets is alleging that Nvidia and Microsoft infringed on its patent for advanced data processing units, or DPUs, “that enable accelerated computing and artificial intelligence” in data centers, according to a lawsuit filed on Thursday in U.S. District Court for the Western District of Texas, Waco Division.
The startup says it is the inventor of advanced DPUs, which improve efficiency of intense workloads, and is accusing Nvidia and Microsoft of forming “an illegal cartel” through an entity called RPX, which has allegedly allowed it to “avoid paying the fair market price” for the startup’s patented technology. Xockets claims the chipmaker “did not invent the technology” in three of its DPUs — BlueField, ConnectX, and NVLink Switch. Its DPUs enable its highly sought-after graphics processing units, or GPUs, which are used by major tech companies to train and run advanced large language models.
The lawsuit alleges Nvidia has infringed on Xockets’ patents since its acquisition of interconnect technology startup Mellanox in 2020. Mellanox adopted the startup’s technology in 2016 without its knowledge or permission, the lawsuit says.
Both Nvidia and Microsoft declined to comment.
“Nvidia’s use of Xockets’ patented DPU technology has allowed Nvidia to monopolize the field of GPU-enabled AI servers and Microsoft to monopolize the field of GPU-enabled AI platforms — and is critical to their success and market capitalization,” Xockets said in a statement. The startup also said that it was “rebuffed” when it tried to negotiate with Microsoft and Nvidia.
Xockets is seeking injunctions to prevent Nvidia from releasing its Blackwell AI platform and stop Microsoft from using it. The startup is also seeking unspecified damages.
“Xockets is taking a stand on behalf of all innovators” Robert Cote, a Xockets board member and IP investor, said in a statement. “Xockets is seeking strict enforcement of its IP rights by seeking injunctive relief to put an end to the RPX cartel that Big Tech uses to devalue the IP of other innovators, and to halt the willful patent infringement,” he added.
In the same press release, Xockets said its investors include Intel CTO Greg Lavender as well as Yahoo co-founder Jerry Yang, via “his venture capital firm.”