In brief

  • The graphics chip manufacturer has beaten a lawsuit that claimed that it misled investors by failing to disclose the size of its crypto mining business.
  • The judge concluded that the investors' evidence wasn't convincing.

Nvidia yesterday put to bed a two-year-old lawsuit from investors, dismissing claims that the US graphics chip company hid its reliance on its burgeoning cryptocurrency mining business to the tune of more than $1 billion. 

The allegations “do not plausibly suggest that defendants acted with at least deliberate or conscious recklessness," concluded Judge Haywood Gilliam. The judge said that the defendants couldn’t appeal the case.

What’s the case about?

Nvidia’s graphics cards are popular with operators of cryptocurrency mining rigs. To mine, say, Bitcoin, a computer must race to solve complicated math puzzles. The more powerful the graphics card, the better chance a miner has at earning that Bitcoin


To get ahead of the competition, many crypto miners buy graphics cards from Nvidia, since the company manufactures some of the most powerful graphics chips in the world (and they’ve drained the inventory of its cheaper rival, AMD). Nvidia recently tried to disincentivize crypto miners from buying its graphics cards by launching "non-graphics" chips specifically designed for cryptocurrency mining.

But until they go mainstream, this means that Nvidia’s profits are somewhat tied to the fate of the volatile cryptocurrency market. 

A group of investors, among them pensions firms and fund managers, alleged that Nvidia did not disclose the size of this business, which it claimed was worth more than $1 billion in 2017. The investors attribute the crash of the cryptocurrency market at the end of 2017 to the decline in Nvidia’s stock price. 

When the case first went to court, the judge said there wasn’t enough evidence and said that Nvidia’s investors could amend the case. So amend the case they did: they hired a bunch of economists from Prysm Group, who determined that Nvidia understated their GPU mining sales by $1.126 billion.

But Nvidia’s lawyers dismissed this report as “essentially arbitrary assumptions.” Undeterred, the investors took the case to trial, using a “confidential witness” as their canary in the coal mine. Unfortunately for them, the witness later said that several of the statements attributed to him are “untrue and inaccurate.” 


The judge still allowed some of the witness statements to go forward but found that they didn’t adequately show that directors knew about the crypto sales. This meant that the investors couldn’t prove that the directors lied about the extent of Nvidia’s crypto mining biz.

And because the investors couldn’t get anywhere with the case, the “Court finds that leave to amend is unwarranted,” concluded Judge Gilliam.. 

But not all is lost! Nvidia’s stock price has doubled since the investors filed their suit all those years ago. 

Stay on top of crypto news, get daily updates in your inbox.