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.