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according to foreign media reports on september 6, a startup funded by a yahoo co-founder and intel's chief technology officer is suing nvidia and microsoft, accusing them of infringing on its patents for a key innovation in artificial intelligence chips and participating in a purchasing alliance that tried to artificially manipulate the price of the technology.

in a new lawsuit, texas-based xockets said nvidia infringed on its patented data processing unit (dpu) technology, which helps make cloud infrastructure more efficient by accelerating data-intensive workloads.

xockets said the chip giant inherited the infringement when it acquired mellanox in 2020. the company claims mellanox initially infringed its patents after xockets publicly demonstrated its dpu technology at a conference in 2015.

xockets claims that nvidia's three dpus (bluefield, connectx and nvlink switch) are all based on xockets' patented technology.

the startup also accused microsoft of infringing its patents, claiming that as a customer of nvidia, microsoft had access to nvidia's infringing gpu server computer systems and ai components.

xockets says it made nvidia aware of the alleged infringement — it claims the startup's founder and board member parin dalal raised the issue with nvidia's vice president of dpu business in february 2022. xockets accuses nvidia of pursuing an efficient infringement strategy that basically boils down to infringing now and letting the lawyers figure out the rest later.

xockets also accused nvidia of monopolizing the market for ai gpu servers and participating in a purchasing alliance with microsoft through a group called rpx.

xockets said it was formed at the request of large technology companies to facilitate and create alliances of buyers of intellectual property.

xockets alleges that rpx has pushed members such as nvidia and microsoft to boycott innovative products such as xockets in order to drive down prices, rather than each company negotiating individually.

xockets claims that through a so-called purchasing alliance, microsoft and nvidia are able to monopolize gpu-powered generative ai by controlling the devices and platforms needed to access this capability.

xockets is seeking damages for alleged infringement and asking the court to order the two companies to stop violating its patents and antitrust laws.

although the company faces competition from two of the largest companies in the united states, intellectual property lawyer robert cote, an xockets investor and board member, tells the verge that xockets has enough funding to take on the giants.

dalal is currently an employee at google, where he is a lead engineer for machine learning and artificial intelligence, though google does not appear to be playing a formal role in the lawsuit.

cote said he could not comment on google. nvidia and google declined to comment. microsoft and rpx did not immediately respond.