Nvidia and Microsoft Face Patent Lawsuit Over AI Computing Technology

Nvidia, Microsoft hit with patent lawsuit over AI computing technology - Times of India

Texas-based Xockets has sued Nvidia and Microsoft for allegedly using its data processor technology without permission to develop AI products. Filed in Waco, Texas, the lawsuit also accuses the companies of antitrust violations. Xockets seeks unspecified triple damages and a court order to halt sales of the infringing products.Artificial intelligence computing giants Nvidia and Microsoft were sued in US court on Thursday for allegedly stealing a small Texas company's data processor technology to help fuel development of AI products. Plaintiff Xockets accused Nvidia and Microsoft of "rampant" patent infringement in the lawsuit, filed in Waco, Texas, federal court. Xockets also said the companies violated antitrust law by conspiring with each other and with patent risk management company RPX to fix and drive down the price of Xockets' technology. "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. Nvidia declined to comment. Microsoft and RPX, which is also a defendant, did not immediately respond to requests for comment. Microsoft has invested billions into a partnership with ChatGPT maker OpenAI, which has become the face of generative AI. Nvidia's equipment is used in data centers that help develop and run AI systems. Xockets, founded in 2012, said its inventions for "data processing units," or DPUs, are essential elements in some of Nvidia and Microsoft's systems. It said its technology allows computer systems to offload and accelerate some tasks that would otherwise overburden server processors. The lawsuit said Xockets sought to license its technology to Nvidia and Microsoft, but the companies formed a pact to channel any licensing negotiations through RPX. Xockets said it was seeking unspecified triple damages and a court order that would block the sale of products that allegedly contain patent-infringing technology.

Nvidia, Microsoft hit with patent lawsuit over AI computing technology

Artificial intelligence computing giants Nvidia and Microsoft were sued in U.S. court on Thursday for allegedly stealing a small Texas company's data processor technology to help fuel development of AI products. Plaintiff Xockets accused Nvidia and Microsoft of "rampant" patent infringement in the lawsuit, filed in Waco, Texas, federal court. Xockets also said the companies violated antitrust law by conspiring with each other and with patent risk management company RPX to fix and drive down the price of Xockets' technology. "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. Meta's AI assistant has 400 million monthly active users in a close contest with OpenAI's ChatGPT: Report Nvidia declined to comment. Microsoft and RPX, which is also a defendant, did not immediately respond to requests for comment. Microsoft has invested billions into a partnership with ChatGPT maker OpenAI, which has become the face of generative AI. Nvidia's equipment is used in data centers that help develop and run AI systems. Xockets, founded in 2012, said its inventions for "data processing units," or DPUs, are essential elements in some of Nvidia and Microsoft's systems. It said its technology allows computer systems to offload and accelerate some tasks that would otherwise overburden server processors. The lawsuit said Xockets sought to license its technology to Nvidia and Microsoft, but the companies formed a pact to channel any licensing negotiations through RPX. Apple, Nvidia in talks to join OpenAI funding round, reports say Xockets said it was seeking unspecified triple damages and a court order that would block the sale of products that allegedly contain patent-infringing technology. 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. For Xockets: Jamie McDole of Winstead; Jason Sheasby of Irell & Manella; and Max Ciccarelli of Ciccarelli Law Firm For defendants: No appearances yet Published - September 06, 2024 10:46 am IST Read Comments

Nvidia and Microsoft Face Lawsuit Alleging AI Chip-Related Patent Infringement | PYMNTS.com

Nvidia, Microsoft and patent risk management company RPX are facing a lawsuit accusing them of "rampant" patent infringement and antitrust law violations. The suit was filed Thursday (Sept. 5) in a Waco, Texas, federal court by Xockets, Reuters reported Thursday. In the lawsuit, Xockets alleged that the companies stole its data processor technology to help develop artificial intelligence (AI) products and conspired with each other to drive down the price of its technology, according to the report. Reached by PYMNTS, spokespeople for Microsoft and Nvidia declined to comment on the report. RPX did not immediately reply to PYMNTS' request for comment. Xockets, a small Texas company that developed inventions for data processing units (DPUs), said in its lawsuit that it tried to license its technology to Nvidia and Microsoft and that those two companies collaborated to require licensing negotiations to go through RPX, per the report. The company is seeking unspecified damages and a court order blocking the sale of products that it alleges contain technology that infringes on its patent, according to the report. The products Xockets aims to block include Nvidia's new Blackwell GPU-enabled AI computer systems, which are reportedly scheduled to start shipping this fall, and Microsoft's use of the Blackwell systems for its generative AI platforms, Xockets said in a Thursday press release. "Xockets invented advanced DPU technology, including new computing and switching plane architectures for a new class of cloud processors, that have enabled the AI revolution and are critical to both Nvidia's and Microsoft's continued success," Xockets board member Robert Cote said in the release. "They have refused to do the right thing and license Xockets' technology." The generative AI boom has reshaped the tech landscape, with Nvidia emerging as a key beneficiary, PYMNTS reported Aug. 27. The company's chips have become essential infrastructure for the AI revolution, powering everything from chatbots and image generators to advanced healthcare, finance and scientific research applications. Big Tech firms are racing to develop custom chips that supercharge the efficiency and cut costs of AI, PYMNTS reported in April. Custom chips may reduce AI costs for business and provide other benefits like enhanced privacy and proprietary data control.

Patent Lawsuit Accuses Microsoft, Nvidia of Forming 'Illegal Cartel'

Tech startup Xockets is suing Nvidia and Microsoft, alleging antitrust violations and patent infringement, according to legal documents published Thursday. The startup designs data processing units (DPUs), that power AI computing in cloud data centers. The company believes Microsoft and Nvidia have colluded in a price-fixing scheme to keep Xockets' DPU prices down, forming an "illegal cartel," according to a release and legal filings. Xockets also alleges Nvidia has infringed on its patents and wants Nvidia to delay releasing its upcoming Blackwell GPUs, which were unveiled earlier this year and are designed for AI model training applications. Google, Meta, and Microsoft have preordered billions of dollars worth of these GPUs collectively, though reports of a "design flaw" may have already set back Blackwell's release date to early 2025. Xockets wants Nvidia to pay more to license what it says is its tech, and alleges that Nvidia based its BlueField, ConnectX, and NVLink Switch DPUs for cloud computing on its technology, as well. The lawsuit states that a Xockets executive met with Nvidia executives back in 2022, and Nvidia's VP of DPUs, Gady Rosenfeld, reportedly called Xockets' tech "very interesting." Ultimately, Nvidia and Microsoft licensed Xockets tech through a patent management company called RPX, which allegedly helped the tech giants drive pricing down, according to the lawsuit. "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," says Xockets investor and board member Robert Cote in a statement, adding: "They are engaging in illegal activities that are part of Big Tech's predatory infringement playbook, a strategy designed to devalue the IP of other innovators." Separately, the US Department of Justice has been investigating Nvidia over possible antitrust concerns and reportedly sent subpoenas to gain more information about the chip giant (Nvidia has denied receiving a subpoena). Nvidia's $700 million acquisition of an AI startup earlier this year has come under scrutiny, and it's being investigated over whether it's making it harder for clients to switch to competitors. Nvidia's stock price has surged since the generative AI boom, but fell nearly 11% in the past five days. Nvidia declined to comment. PCMag has reached out to Microsoft for comment.