Crypto Mining GPU Manufacturer, NVidia Petitions Court to Toss Out $1 Billion Class Action
NVidia has petitioned the California court to dismiss the class action suit made by its investors.
The lawsuit against the firm’s top brass alleges that they understated more than $1 Billion in revenue between 2017 and 2018 from crypto mining GPUs instead of owing it to the gaming sector.
Graphic processing Unit manufacturer Nvidia moved to file a petition to drop the class action suit against them. Their shareholders alleged that the company misrepresented its revenues from 2017 -2018.
The initial class-action suit was filed on Dec 2018 in a Californian Northern District Court by the Iron Workers Local 580 Joint Fund, which primarily ensures welfare (pension and health benefits) amongst both working and retired ironworkers.
The plaintiff alleges that the defendants of the suit, Nvidia top brass Jensen Huang and Colette Kress, failed to reveal that their purported earnings from the gaming industry highly relied on sales made to crypto miners.
Their GPUs: GeForce and GTX are popular picks for gaming enthusiasts and crypto miners that may require extra computing power. They later unveiled a chip dubbed – Crypto SKU – tailored for crypto mining activities in 2017. Their sales report indicated that the majority of their sales (north of $1 Billion) were generated from the gaming sector, and only Crypto SKU sales represented the cryptocurrency mining sphere.
In the petition to dismiss the class action, Nvidia has reiterated the remarks by top brass at the time of the initial lawsuit. They have highlighted that there was no way of determining the exact objectives of acquiring their GPUs.
They echoed comments made by founder and CEO Jensen Huang that it was hard to say whether the GPUs purchased for mining or crypto activities. Shifting blame from its executives who have described earnings from crypto accounted for just a tiny fraction of their total revenue.
The Skewed Findings
The firm is alleging the court threw out their initial objection solely based on the Prysm group report. They have maintained that the amended suit doesn’t qualify because it entirely relies on erroneous findings made from a 2018 impact of crypto mining on the firm’s sales inquiry.
This report was penned by Jon Peddie Research consultancy, and Morgan Stanley’s skewed statistic for the gaming chips demand model. They claim that the plaintiff is cherry-picking snippets from the corporate statement while ignoring information volunteered about the company’s revenue streams.