Nvidia is in hot water after one of its software engineers accidentally let a rival company—and his former employer—in on a secret: that he stole its top-secret research and took it to the trillion-dollar tech giant.
During a video call with automotive tech firm Valeo last year, the engineer, Mohammad Moniruzzaman, made a blunder when he shared his screen and showed his ex-colleagues some source code that they immediately recognized as their own.
That’s according to a lawsuit Paris-based Valeo filed against Nvidia earlier this month, in which the former accused the latter of profiting from its trade secrets.
Valeo said that in early 2021—shortly after a major autos equipment manufacturer announced it would move some of its contracts from Valeo to Nvidia—one of its software engineers, Mohammad Moniruzzaman, downloaded the entirety of its advanced parking and driving assistance systems source code.
This was done without authorization, and in breach of the IT code employees are privy to, Valeo said.
“[Moniruzzaman] realized that his knowledge of, and exposure and access to, Valeo proprietary software, technologies, and development techniques would make him exceedingly valuable to Nvidia,” the firm said in the lawsuit.
“Moniruzzaman granted unauthorized access of Valeo’s systems to his own personal email account. He then stole tens of thousands of files and 6 gigabytes of source code, after which, [he] attempted to cover his tracks by subsequently removing his personal account from authorized access.”
Moniruzzaman joined Nvidia in the summer of 2021 after around six years at Valeo.
The lawsuit alleged that he took “scores of Valeo Word documents, PowerPoint presentations, PDF files, and Excel spreadsheets… to facilitate his understanding of the stolen code, the operation of Valeo’s ultrasonic sensors, and the data obtained and transmitted by those sensors” with him to Nvidia—where he was soon promoted to a senior position, and worked on a project for the manufacturer that had partially moved some of its software development contracts from Valeo to Nvidia.
However, it took six months for Valeo the realize something was amiss—and the company said it was clued in thanks to a simple error made on a video call.
Screensharing blunder
Under the terms of the contact with the manufacturer, engineers from both Valeo and Nvidia were required to participate in virtual collaboration meetings, Valeo said in its legal filings. One of those conference calls took place on March 8, 2022.
“Mr. Moniruzzaman, now employed by Nvidia, attended the videoconference call—along with four other Nvidia employees—and shared his computer screen during the call,” Valeo’s legal team said.
“When he minimized the PowerPoint presentation he had been sharing, however, he revealed one of Valeo’s verbatim source code files open on his computer. So brazen was Mr. Moniruzzaman’s theft, the file path on his screen still read ‘ValeoDocs.’”
When another participant on the call alerted Moniruzzaman to the fact he was still sharing his screen, he stopped his screen share of Valeo’s code, according to legal documents. But by then, it was already too late.
Upon recognizing the source code and file names that were displayed on Moniruzzaman’s screen during the call, Valeo employees took a screenshot and passed it back to their employer. Valeo went on to conduct an IT audit—and said it discovered the extent of the information Moniruzzaman had taken with him upon his departure from the firm.
Valeo said his actions had breached its IT rules and policy, violated the law, and misappropriated Valeo’s trade secrets—and accused Nvidia of using that information whilst knowing it had been “acquired through improper means.”
A spokesperson for Valeo told Fortune that the company makes “significant investments in innovation” and files more patents globally than any other French firm.
“It is in this regard normal to protect those investments,” they said, but noted that they could not comment on ongoing legal proceedings.
Representatives for Nvidia declined to comment on the lawsuit. However, the company’s German lawyers wrote in a letter to Valeo after an initial confrontation last year that it “has no interest in Valeo’s code or its alleged trade secrets and has taken prompt concrete steps to protect [Valeo’s] asserted rights,” according to Bloomberg.
Unlawful acquisition
Moniruzzaman, who is based in Germany, was convicted of unlawful acquisition, use, and disclosure of Valeo’s trade secrets by German authorities in September this year, according to the lawsuit.
It is unclear whether he is still working for Nvidia.
However, Valeo is seeking further legal consequences for Nvidia, including an undetermined amount in restitution and damages, an injunction to prevent Nvidia using or disclosing its trade secrets, and a declaration that Nvidia has no rights to use Valeo’s confidential research.
“Nvidia’s misappropriation of Valeo’s trade secrets provided Nvidia and its engineers a shortcut in the development of its first parking-assistance software, and saved Nvidia millions, perhaps hundreds of millions, of dollars in development costs,” Valeo’s lawyers wrote. “In using these stolen trade secrets in connection with the research and development of a competing product, Nvidia has diminished the value of Valeo’s trade secrets to Valeo.”
Valeo said in the lawsuit that Nvidia has made—and will continue to make—higher profits than it otherwise would have made thanks to its possession of information from Valeo. The specific amount of such profits needed to be proven at trial, Valeo said.
“By leveraging Valeo’s dedication to innovation and engineering, the potential for Nvidia’s ill-gotten gains is staggering,” the company’s representatives added. “Nvidia willfully and maliciously misappropriated Valeo’s trade secrets in order to gain economic value from those trade secrets. Unless Nvidia’s use and misappropriation is stopped, Nvidia’s unlawful actions will be the blueprint for future corporate espionage.”
Nvidia’s earnings have skyrocketed this year thanks to a boom in demand for AI technology, with the company announcing this week that its third quarter revenue had jumped 206% from a year earlier.
The company has enjoyed a major share price rally in 2023 thanks to the AI gold rush, its earnings smashing Wall Street estimates and CEO Jensen Huang publicly declaring his bullishness on AI, cementing its place within the exclusive trillion-dollar valuation club.
However, Nvidia’s stock dropped slightly after its earnings call this week, which some analysts have suggested could be a sign investors are beginning to see the company as overvalued.
Shares of Nvidia were around 2.4% lower during pre-market trade on Friday.
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