Nvidia’s legal battle over allegations of misleading investors about its sales to cryptocurrency miners has been revived after the U.S. Supreme Court dismissed the company’s appeal on December 11, 2024. The decision, delivered without explanation, reinstates a shareholder class-action lawsuit that Nvidia had successfully gotten dismissed in 2021 but was later revived by an appellate court ruling in 2023.
The lawsuit, initially filed in 2018, accuses Nvidia of concealing over $1 billion in revenue derived from GPU sales to crypto miners. Shareholders claim the company’s executives, including CEO Jensen Huang, downplayed the significance of crypto-related sales during a boom period that coincided with rising demand for mining hardware. When the cryptocurrency market crashed in late 2018, Nvidia’s sales plummeted, and its stock price dropped nearly 30% in just two days, leading to substantial investor losses.
Nvidia had sought to overturn the Ninth Circuit Court of Appeals’ August 2023 decision that revived the case. However, the Supreme Court’s dismissal of Nvidia’s appeal means the lawsuit will proceed in lower courts. The court did not provide any reason for rejecting the appeal, leaving Nvidia to continue its defense in the case.
A spokesperson for Nvidia expressed disappointment at the Supreme Court’s decision but reaffirmed the company’s readiness to defend itself. “We remain committed to supporting consistent and predictable standards in securities litigation to protect shareholders and ensure a strong economy,” the spokesperson said.
Shareholders have reportedly amassed substantial evidence to back their claims, including statements from former Nvidia executives and a report from the Bank of Canada suggesting Nvidia understated its crypto revenue by $1.35 billion. Both the U.S. Department of Justice and the Securities and Exchange Commission (SEC) have also supported the investors’ position, stating that Nvidia’s arguments in the case lack merit.
In 2022, Nvidia agreed to pay $5.5 million to the SEC to settle charges that it failed to adequately disclose the impact of cryptocurrency mining on its gaming business. While the settlement did not require Nvidia to admit wrongdoing, it added weight to concerns over the company’s transparency regarding its financial disclosures.
The revived lawsuit underscores ongoing scrutiny of Nvidia’s business practices during a volatile period for the cryptocurrency and tech industries. If the plaintiffs succeed, the case could have significant implications for how companies disclose industry-specific revenue streams, especially in emerging markets like cryptocurrency mining.
As the case moves forward, Nvidia faces increasing pressure to address allegations of misleading investors while defending its reputation as a leader in GPU technology and AI advancements.
