“Nvidia and Microsoft are abusing their dominance and market power in AI in an attempt to pay little or nothing for the innovations of others that are used in their products,” Xockets board member Robert Cote said in a statement. “They are engaging in illegal activities that art part of Big Tech’s predatory infringement playbook, a strategy designed to devalue the IP of other innovators.”
A technology startup has filed a lawsuit against Microsoft and Nvidia, claiming that the two companies infringed upon its patents and violated federal antitrust statutes.
According to PC Magazine, the complaint was brought on behalf of Texas-based Xockets.
Xockets, which is headquartered in Austin, designs and sells data processing units. Sometimes termed “DPUs,” these units are a relatively new class of programmable processors employed in artificial intelligence-driven cloud-native platforms.
Attorneys for Xockets say that Microsoft and Nvidia collaborated in a price-fixing scheme to suppress Xockets’ DPU prices, thereby forming an “illegal cartel” in violation of federal antitrust statutes.
“The illegal buyers’ cartel in this case was facilitated by RPX,” the lawsuit alleges. “RPX was formed at the request of Big Tech companies to enable and create buyers’ cartels for intellectual properties.”
The complaint suggests that RPX advertised that it could buy certain technologies and components at “wholesale” prices, while its clients would “otherwise pay ‘retail’ if transacting on their own.”
Xockets claims that Nvidia’s use of companies like RPX, among others, allowed it to acquire the technology and components necessary to design products like Nvidia’s BlueField, ConnectX, and NVLinkSwitch DPUs.
But the designs for each of these products, Xockets says, are based off its own patent-protected designs and products.
“Since the introduction of Xockets’ patented designs for its DPUs, NVIDIA’s market capitalization was exploded, from $180 billion to approximately $3 trillion,” the lawsuit alleges. “NVIDIA did not invent the technology in its BlueField, ConnectX, and NVLink Switch DPUs. The technology was taken from Xockets. And it was done so knowingly. Instead of paying fair value for the technology, Microsoft and NVIDIA took it without permission. And when NVIDIA and Microsoft were put on notice that Xockets would not allow its technology to be used illegally without a license they formed an illegal buyers’ cartel with RPX to drive the price of Xockets’ patents on its DPU inventions below the market price and/or drive Xockets out of business.”
Xockets also says that Nvidia infringed on its patents—and wants Nvidia to delay the release of its upcoming “Blackwell” GPUs, which were designed and marketed for use in AI model training.
“Nvidia and Microsoft are abusing their dominance and market power in AI in an attempt to pay little or nothing for the innovations of others that are used in their products,” Xockets board member Robert Cote said in a statement. “They are engaging in illegal activities that art part of Big Tech’s predatory infringement playbook, a strategy designed to devalue the IP of other innovators.”
Sources
Nvidia, Microsoft hit with patent lawsuit over AI computing technology
Patent Lawsuit Accuses Microsoft, Nvidia of Forming ‘Illegal Cartel’
Xockets, Inc., v. Nvidia Corporation, Microsoft Corporation, and RPX Corporation
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