In the AI field there is a David who challenges (in court) two Goliaths: Nvidia and Microsoft

15 September 20244 weeks ago babelfish

Microsoft and Nvidia dragged to court by a Texan startup which, in addition to a patent infringement issue, claims that the two Big Techs are a cartel in the artificial intelligence sector. A story that could interest many antitrust authorities around the world

A startup takes two multinational consumer electronics companies to court. It doesn't happen every day. But it happened to Nvidia and Microsoft , dragged before the judge by Xockets, a small company specialized in the development of DPUs (Data Processing Units) which however has big names behind it: the cofounder of Yahoo and the CTO of Intel. In short, she has no shortage of resources to bring a lawsuit.

DOES XOCKETS HAVE MICROSOFT AND NVIDIA IN THE BACK?

Xockets has targeted data processing units that support cloud infrastructure by accelerating data-intensive workloads. These are units used in the last period by the entire nascent sector of artificial intelligence which, for obvious reasons, requires an enormous exchange of information on machines.

The startup claims that some Nvidia data processing units – specifically BlueField, ConnectX, and NVLink Switch – are actually based on patent-protected technologies.

IT ALL ORIGINATED WITH ANOTHER COMPANY

According to the citation – which summarily explains the elements in the hands of the startup – Nvidia would not have acted directly, limiting itself to not intervening after inheriting the patent infringement through the acquisition of Mellanox in 2020.

In short, the acquired Mellanox would have been the first to infringe Xockets' patents following the public demonstration of its DPU technology in 2015. Parin Dalal , founder of the startup, claims to have raised the issue as early as 2022, reporting it to the vice president of the division Nvidia DPU.

And, again according to the reconstruction of the small but challenging reality, the chipmaker would have shrugged, preferring, pending a possible judgment that had not yet been initiated, to continue to achieve significant advantages.

THE CARTEL HYPOTHESIS ON ARTIFICIAL INTELLIGENCE

If a lawsuit against Nvidia wasn't daring enough in itself, Xockets then decided to bring in Microsoft too: the two giants would have in fact monopolized the GPU-based server market and created a cartel through Rpx, a company that according to the startup “was formed at the request of tech giants to create buyers' cartels for intellectual property.”

Given the economic interests at stake, it is a profile that is more likely to be listened to or in any case capable of turning on the necessary warning lights on the dashboard of the competent authorities, in the USA but also in other countries. In fact, investigations could be started on the basis of what was collected by

SERVERS AND PLATFORMS SHARED BY THE TWO BIG BIG?

For the plaintiff, through the alleged cartel, Nvidia and Microsoft would be able to "monopolize generative artificial intelligence powered by GPUs through control of the equipment and platforms to access this capability."

The accusation claims that the division is clear and this illicit conduct would have allowed Nvidia to monopolize the AI server sector and Microsoft to dominate artificial intelligence platforms. Although the market has developed with a plurality of players, only a few big players stand out, so it is possible that some antitrust authorities, on both sides of the Atlantic, will carefully follow the story and all the evidence that Xockets will be able to produce .

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/microsoft-nvidia-tribunale-xockets/ on Sun, 15 Sep 2024 14:30:29 +0000.