Nvidia and Microsoft Patent Lawsuit: The Legal Drama Unfolds in AI Computing Sector

Published On Fri Sep 06 2024

Nvidia, Microsoft hit with patent lawsuit over AI computing

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, Microsoft Hit with Patent Lawsuit Over AI Computing

“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.

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.

Lawsuit Details

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.