U.S. chip startup claims Huawei trying to steal its technology

An escalating battle between the U.S. and China for supremacy in semiconductor technology is playing out in federal court between Chinese telecommunications giant Huawei Technologies Co. and a Silicon Valley startup backed by Microsoft Corp. and Dell Technologies Inc.

CNEX Labs Inc., based in San Jose, Calif., and its co-founder Yiren “Ronnie” Huang alleged in Texas federal court this week that Huawei and its Futurewei unit have engaged in a multiyear plan to steal CNEX’s technology.

A lawyer for Huawei denied the allegations, which were made in a countersuit in response to a complaint Huawei itself had filed last year, accusing CNEX and Huang — its former employee — of stealing its trade secrets and demanding detailed information about CNEX’s technology.

The intellectual property in dispute — solid-state drive (SSD) storage technology — allows massive data centers to manage the ever-growing volume of information generated by artificial intelligence and other advanced applications, prompting investment in CNEX from the venture-capital arms of Dell and Microsoft MSFT, -2.00% , which operate leading storage and cloud platforms, respectively.

An expanded version of this report appears on WSJ.com.

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