Nvidia accused of downplaying the importance of crypto miners’ purchases
- Nvidia once again finds itself targeted by a lawsuit accusing it of publishing false information.
- According to the filing, the company published misleading statements to reduce its dependence on sales.
- Claimed sales came from the organic growth of gamers, when in reality it came due to miners' interest.
Nvidia Corporation, one of the world’s best-known tech firms and manufacturers of GPUs, chips, and similar products, once again found itself targeted by a class-action lawsuit. The lawsuit is actually an amended filing of an older lawsuit. It accused the firm of misrepresenting as much as $1 billion in order to convince others that the crypto mining sector doesn’t have a major impact on its chip sales.
An amended filing once again blames the firm for false statements
The complaint was filed once more fairly recently, on May 14th, and it claims that the company has issued misleading statements deliberately. The goal of the statements was to downplay the extent to which the firm’s sales relied on crypto miners, in 2017 and 2018. Estimates say that sales to miners represented more than half of its total sales. Meanwhile, the firm said that its dependence on crypto sector sales was small.
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The tech giant got sued by investors who suffered losses when the firm’s stock price crashed by 30%. This is a much higher drop than the estimated 7% that Nvidia predicted in late 2018.
Nvidia also claimed that the gaming segment sales grew from one quarter to another, which comes from the rising number of gamers. In turn, the demand skyrocketed as well.
The filing against the firm says that Nvidia misrepresentations managed to obscure around $1.126 billion, all of which came from sales to crypto miners. Meanwhile, a separate report states that the company obfuscated an even larger amount of $1.35 billion.
Miners kept purchasing gaming GPUs
Back in 2017, Nvidia’s GPUs became rather popular with crypto miners, which led to a massive surge in the company’s profits. This led to the firm seriously considering the crypto industry, and even launching a special chip for mining in May 2017.
Unfortunately, the chip — Crypto SKU — did not see the popularity the company expected. Most miners simply kept buying GeForce GPUs. However, instead of admitting that the GPUs are being purchased by miners, Nvidia kept claiming that the gaming division is responsible.
As for the Crypto SKU’s poor sales, the company claimed that this is proof that demand from the mining industry is weak and nearly neglectable. The firm did not want investors to start considering crypto performance, or they could start ignoring its stock to reflect crypto volatility.
As a result, Nvidia capitalizes on miners’ demand, while falsely claiming that the sales came from gamers, as the complaining claims. The lawsuit against the company was filed a while ago, but the federal judge seemingly downsized it in March, which is why the plaintiffs decided to amend it and try again.