Nvidia did not cheat investors on mining proceeds between 2017 and 2018

Nvidia can breathe a sigh of relief: District Judge Haywood Gilliam has ended to a lawsuit in which the US company was accused of failing to report sales of $ 1.1 billion related to the business cryptocurrency mining between May 2017 and July 2018.

In short (you can learn more here), according to the plaintiffs Nvidia mixed a good part of the proceeds of the mining with those of the Gaming division, thus giving a false feeling of solidity. Many people bought the shares, convinced that they could go up further, but when the phenomenon of mining deflated, turnover and shares plummeted. According to the plaintiffs, Nvidia’s management was fully aware of the scale of mining-related sales and, by failing to disclose accurate data, would have deliberately misled the market.

IHowever, the judge felt that insufficient evidence had been brought to his attention to support this thesis. “The prosecution did not prove that the company acted with deliberate irresponsibility in the decision not to disclose revenue information,” the ruling read. The court also found the reference to alleged violations of securities laws inadequate. Also, in the final part of the process, a secret witness brought to testify by the plaintiffs stated that some of his statements were false and inaccurate, and this he deposed in favor of the company.

The prosecution failed to prove that Nvidia duped investors in 2017-2018. Not even a report by Prysm Group economists was needed, with the firm’s lawyers labeling the report “based on arbitrary figures”. So, after years of back and forth, Gilliam put an end to the quarrel.

It is curious that this story ends at a time when we are faced with the same problem, with the release of new Nvidia GPUs so powerful that they make mining with gaming video cards a source of income. The company has estimated that a portion of its Q4 2020 revenue, amounting to $ 100-300 million, could come from miners’ purchases.

The figure must be compared with the 2.5 billion dollars generated by the Gaming division. At the same time, Nvidia said that since it does not sell video cards directly, but passes through partners, it cannot accurately determine how many GPUs end up in the hands of miners.

The company recently announced a line of CMP cards dedicated exclusively to miners, so as not to distract the GeForce cards from the gaming market which is already suffering from a demand exceeding the production capacity. Starting from the latest RTX 3060 12GB, the company has also implemented a software limiter that slows down the performance with the typical calculations of the mining of some cryptocurrencies such as Ethereum.