Lawsuit Details
Artificial intelligence computing giants Nvidia (NVDA.O) and Microsoft (MSFT.O) were sued in U.S. court on Thursday for allegedly stealing a small Texas company’s data processor technology to aid the development of AI products.
Claims Against Nvidia and Microsoft
Plaintiff Xockets accuses Nvidia and Microsoft of “rampant” patent infringement in the lawsuit filed in Waco, Texas federal court. Xockets also claims the companies violated antitrust laws by conspiring with each other and with patent risk management company RPX to fix and drive down the price of Xockets’ technology.
Statements from Xockets
Xockets board member Robert Cote stated, “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.”
Responses from Defendants
Nvidia declined to comment on the lawsuit. Microsoft and RPX, which is also named as a defendant, did not immediately respond to requests for comment.
Background on Technology and Investments
Microsoft has invested billions in its partnership with ChatGPT maker OpenAI, a leader in generative AI. Nvidia’s equipment is integral to data centers that support AI development. Xockets, founded in 2012, claims its inventions for “data processing units” (DPUs) are crucial to some of Nvidia and Microsoft’s systems. Xockets’ technology is said to offload and accelerate tasks that would otherwise burden server processors.
Legal Actions Sought
The lawsuit states that Xockets attempted to license its technology to Nvidia and Microsoft but alleges that the companies formed a pact to route any licensing negotiations through RPX. Xockets seeks unspecified triple damages and a court order to block the sale of products containing the alleged patent-infringing technology.
Case Information
The case is Xockets Inc v Nvidia, Microsoft, and RPX, U.S. District Court for the Western District of Texas, No. 6:24-cv-00453-ADA.
Legal Representation for Xockets
- Jamie McDole of Winstead
- Jason Sheasby of Irell & Manella
- Max Ciccarelli of Ciccarelli Law Firm
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