Nvidia faces billion-dollar patent challenge over its new AI Blackwell chips

Xockets claims that Nvidia’s AI acceleration know-how wasn’t invented in-house however “stolen” by Mellanox, a competitor Nvidia acquired in 2020 for practically $7 billion.

The agency estimates its knowledge processing unit (DPU) know-how has saved Nvidia’s prospects roughly $45,000 per server on 1,000,000 servers geared up with Nvidia’s BlueField, ConnectX, and NVLink Swap DPUs.

“You are able to do the maths—1,000,000 servers at $40,000 to $45,000 is extraordinary,” stated Robert Cote, a Xockets board member, throughout a Thursday presentation hosted by ACG Analytics. “We search a portion of that profit.”

Cote, refuting claims that Xockets is a patent troll, stated the corporate has filed for an injunction to dam Blackwell gross sales that depend on its alleged IP. This could permit time to barter a licensing deal or promote the corporate.

Stopping the Blackwell launch poses a severe threat for Nvidia, which dominates 90% of the AI accelerator chip market.

The corporate expects Blackwell shipments to usher in billions of {dollars} within the fiscal fourth quarter ending January.

Xockets’ case in opposition to Nvidia

The case facilities on Xockets’ declare that it developed the know-how behind Nvidia’s DPUs, which act as a 3rd sort of microchip, alongside CPUs and GPUs, optimized for networking servers at scale.

“This will likely be one of many three main pillars of computing,” Nvidia CEO Jensen Huang has stated.

Whereas DPUs don’t seem in private computer systems, they deal with server-to-server communications at knowledge facilities, enabling large AI compute clusters to work collectively effectively. As large-scale AI fashions like OpenAI’s GPT require such scale, DPU-enabled {hardware} helps save power and cut back prices.

Xockets claims it launched the world’s first DPU, the StreamSwitch, in 2015. Months later, it alleges Mellanox unlawfully adopted the know-how. Xockets argues that Nvidia’s pivot from gaming and crypto mining to AI computing solely succeeded after buying Mellanox and its DPU capabilities.

“With out the pace and effectivity enabled by DPUs, we wouldn’t be unlocking the AI revolution at the moment,” Cote stated, noting that knowledge facilities can now accomplish in weeks what used to take years.

Patent regulation precedent following Apple Watch ruling

Cote pointed to the U.S. Worldwide Commerce Fee’s latest ruling that Apple’s smartwatch infringed on Masimo’s oxygen-level monitoring patent. “They confirmed an injunctive treatment can shut down even an organization as highly effective as Apple,” he stated.

A courtroom listening to initially set for September 19 has been delayed by just a few weeks. “We’ll know extra about our injunction request by the tip of September,” Cote stated, including that Xockets goals for a jury trial subsequent yr to resolve the dispute.

Nvidia declined to touch upon the allegations.