NVIDIA Class Action Court: $1 Billion Crypto Mining Claims

NVIDIA faces a class action lawsuit after a US federal judge allowed an investor lawsuit to proceed, alleging the company concealed over $1 billion in crypto-mining related graphics card sales.

NVIDIA Accused of Hiding Crypto Sales

The suit, originally filed in 2018, contends that NVIDIA misled shareholders by attributing surging revenue to gaming demand while minimizing the substantial contribution from cryptocurrency miners.

Internal Testimony and Documents

Internal testimony and documents disclosed in the court filing place undisclosed crypto-related GPU revenue between $1.1 billion and $1.35 billion, far exceeding what NVIDIA publicly acknowledged at the time.

NVIDIA's Defense and Industry Backing

NVIDIA has long maintained that crypto mining accounted for only a small fraction of its business and that any mining-related exposure was largely confined to dedicated Crypto SKUs within its OEM segment.

Regulatory Sanctions

Regulators have previously sanctioned NVIDIA over related disclosure issues, with the Securities and Exchange Commission (SEC) fining the company $5.5 million in 2022 for allegedly failing to fully disclose how crypto-mining demand affected fiscal 2018 results.

Market Consequences and Class Action Certification

The alleged concealment had real market consequences, with NVIDIA's stock plunging over two trading days after the company sharply lowered its revenue guidance, citing excess inventory and weaker miner orders.

Key Takeaways

• NVIDIA faces a class action lawsuit over alleged concealment of $1 billion in crypto-mining related sales
• Internal testimony and documents suggest NVIDIA was aware of the scale of miner demand but publicly downplayed its significance
• The company has been sanctioned by regulators over related disclosure issues, including a $5.5 million fine from the SEC
• NVIDIA's stock has fallen sharply in response to the lawsuit and related market consequences

Frequently Asked Questions

What is the basis of the class action lawsuit against NVIDIA?

The lawsuit alleges that NVIDIA concealed over $1 billion in crypto-mining related graphics card sales, misleading shareholders about the drivers of its revenue.

How has NVIDIA responded to the allegations?

NVIDIA has maintained that crypto mining accounted for only a small fraction of its business, but internal testimony and documents suggest the company was aware of the scale of miner demand.