Zetwerk Sued In US, Faces $1 Billion Damages Claim

Indian manufacturing services provider Zetwerk is embroiled in a significant legal dispute in the United States. Ayr Energy, a US-based transformer startup, has filed a lawsuit against Zetwerk with the United States International Trade Commission (USITC) and in a Texas court, demanding at least $1 billion in damages. Ayr Energy accuses Zetwerk of trade secret theft, trademark infringement, and false advertising. The company also seeks an import ban on allegedly infringing transformers entering the US. Zetwerk stated that Ayr Energy filed this action after withdrawing a prior, similar claim in California, which it claims gained no traction. Zetwerk views Ayr Energy's lawsuit as a response to an earlier legal action initiated by Zetwerk in Texas in October 2025, seeking $100 million in damages. Zetwerk, in turn, alleges that Ayr Energy's co-founder, Anirudh Reddy, established the rival company while still employed at Zetwerk and absconded with confidential information. According to Zetwerk, Reddy downloaded proprietary customer lists and pricing models before his resignation in January 2025. Zetwerk contends that Ayr Energy subsequently used this information to secure contracts, resulting in losses for Zetwerk estimated at nearly $77 million. The escalating dispute between the two companies centers on customer data, employee movement, and business secrets within the US transformer market. The sectors where these companies compete include the energy transformer market and related services. Zetwerk, which is preparing for an IPO in India, has raised over $700 million in funding from investors including Peak XV Partners and Lightspeed. The legal battle intensifies as both firms aim for expansion in the US market. Zetwerk's IPO process is underway in India, while Ayr Energy is seeking to block the import of Zetwerk's products into the United States.