On September 5, AI startup Xockets filed a lawsuit in the U.S. District Court for the Western District of Texas, accusing Nvidia, Microsoft, and RPX of colluding to infringe on seven of its patents related to critical Data Processing Unit (DPU) technology and refusing to negotiate directly with Xockets regarding patent licensing, in violation of U.S. antitrust laws. Therefore, in addition to monetary compensation, Xockets is also seeking a court order to prevent Nvidia from releasing AI systems based on the Blackwell GPU.

The complaint states that these technologies, originating from Xockets, can offload data-intensive tasks related to AI computation to DPU components, thereby improving cloud infrastructure performance. It also specifies three particular Nvidia DPU products—BlueField, ConnectX, and NVLink Switch. Xockets further claims that the two companies' actions were "deliberate."

Additionally, Xockets believes that Nvidia has monopolized the AIGPU server market with these infringing DPU products, while Microsoft has monopolized the AI platform sector supporting GPUs. The two companies are also accused of forming a patent licensing monopoly alliance with RPX (the third defendant) to manipulate the pricing of this technology.

As of the time of publication, Nvidia has declined to comment on the matter. Xockets spokesman did not immediately respond.

Founded in 2012, Xockets focuses on big data processing and distributed computing, developing hardware and software acceleration devices for big data processing. It has received funding from Yahoo co-founder and Intel CTO.

In the same year, Xockets co-founder Parin Dalal invented a new type of cloud processor now known as "DPU" and filed the first patent application in May of that year. The company now holds multiple DPU-related patents covering applications in cloud, machine learning, security, network overlay, data stream processing, and cloud computing.

DPU technology centers on optimizing distributed processing of data flows and workloads to achieve cloud offloading of large-scale data traffic and workloads, enhancing cloud computing efficiency. In recent years, with the surge in large-scale computing demands, DPUs have become a critical component in data centers, especially in training large language models and handling AI workloads.

However, in 2015, Mellanox began infringing on this patent after publicly showcasing the technology, and following Nvidia's acquisition of Mellanox in 2020, the infringer became Nvidia. The company’s current BlueField, ConnectX, and NVLink Switch series DPUs incorporate the infringing technology.

In February 2022, Parin Dalal complained to Nvidia’s DPU business VP about the infringement, but it was ultimately unresolved. On the other hand, Microsoft, as a customer of Nvidia, benefits from accessing Nvidia’s infringing GPU server computer systems and AI components.

However, Nvidia and Microsoft may not be the only targets for Xockets. Currently, Broadcom, Intel, AMD, Marvell, Napatech, and Amazon are also actively developing products similar to Nvidia's ConnectX, BlueField, and NVLink, though whether these companies have licensed the technology remains to be seen.

On the 6th, the judge handling the case approved a fast-track hearing scheduled for the 19th of this month, where a preliminary injunction may be issued.

Although Xockets faces two major U.S. tech giants, the company's investor and board member, intellectual property lawyer Robert Cote, stated that Xockets has sufficient funds to handle the case.

At the time of this lawsuit, Nvidia was also reported to have received a subpoena from the U.S. Department of Justice over antitrust issues. On the 4th, the company denied this report. A spokesperson said, "We inquired with the DOJ and the company has not received a subpoena. Nevertheless, we are happy to address any questions regulators may have about our business."

Recently, British regulators also conducted a months-long investigation into Microsoft's acquisition of Inflection AI's CEO Mustafa Suleyman and his team. The Competition and Markets Authority (CMA) stated that the transaction would not significantly harm fair competition in the AI industry.