U.S. Supreme Court Reinstates Nvidia Crypto Sales Lawsuit

• The U.S. Supreme Court declined Nvidia’s appeal in a class-action lawsuit, reviving allegations it misled investors about GPU sales to crypto miners.
• Shareholders claim Nvidia concealed over $1 billion in crypto-related revenue, with evidence backed by the SEC and Justice Department.

Nvidia is back in legal hot water after the United States Supreme Court declined to hear its appeal in a class-action lawsuit alleging the company misled investors about GPU sales to cryptocurrency miners. The court issued a brief order on December 11, dismissing Nvidia’s appeal without explanation, effectively reinstating an appellate court decision to revive the case.

The lawsuit, originally filed in 2018 by a group of Nvidia shareholders, accuses the chipmaker of concealing over $1 billion in revenue tied to sales to crypto miners. The shareholders claim Nvidia’s CEO, Jensen Huang, downplayed the role of cryptocurrency demand in boosting GPU sales. The suit also alleges Nvidia’s reliance on the volatile crypto market led to a significant collapse in sales when the market downturn in late 2018 triggered a 30% drop in the company’s stock price over two days.

Nvidia sought to overturn a Ninth Circuit Court of Appeals ruling from August that reinstated the case after a California district court initially dismissed it in March 2021. In its appeal, Nvidia argued the shareholders’ claims relied on a flawed expert opinion that misrepresented the company’s revenue sources.

The Justice Department and the Securities and Exchange Commission (SEC) opposed Nvidia’s argument, siding with the shareholders. The investors reportedly presented evidence, including statements from former Nvidia executives and a Bank of Canada report alleging the company understated cryptocurrency-related revenue by $1.35 billion.

An Nvidia spokesperson expressed disappointment with the Supreme Court’s decision, stating:

“We would have preferred a decision on the merits affirming the trial court’s dismissal of the case, but we are fully prepared to continue our defense.”

The spokesperson also emphasized Nvidia’s commitment to “consistent and predictable standards in securities litigation.”

This legal development follows Nvidia’s 2022 settlement with the SEC, where it paid $5.5 million to resolve allegations of failing to adequately disclose the impact of crypto mining on its gaming business. The company neither admitted nor denied the SEC’s findings in that case.

Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by Harshajit Sarmah.