Crypto Lawsuit Against Nvidia Dismissed
Leading chip-maker Nvidia has scored a victory in a protracted and potentially financially devastating lawsuit that has been dragging on ever since 2017, thereby effectively dodging a major bullet. Investors four years ago set into motion the wheels of a lawsuit against the technology giant, accusing Nvidia of having purposefully misled the tech maker's backers by providing inaccurate information about how much of its revenue was being generated by crypto miners generating cryptocurrency, and how much by actual sales of hardware.
Investors in the legal documents filed at court claimed that had the chip-making giant been honest about the origins of the bulk of its income, the company's financial backers would have been much better prepared for the major cryptocurrency crash that eventually followed.
Eventually formally filed last year, the lawsuit went as far as alleging that up to 70 per cent of the company's China-based revenue income had been generated by crypto miners during the periods 2017 and 2018.
Not Enough Evidence, Rules Judge
U.S. District Court Judge Haywood Gilliam however earlier this month ruled in Nvidia's favour, handing down the decision that the entire action be dismissed due to a gross lack of evidence. Ruled Judge Gilliam, even though Nvidia didn't explicitly issue a warning to its investors over the possibility of a massive decline in revenue income in the event of an inevitable cryptocurrency crash, the fact that a portion of the company's income was at the time of the great fall generated by Bitcoin miners wasn't exactly a state secret.
Saving grace also had been the fact that the 18 per cent drop in the value of Nvidia's shares had happened already in August of 2017, which decline was back then already attributed to a pending Bitcoin disaster. This means that by the time the cryptocurrency bubble eventually completely burst in November of 2018, investors will have been long aware of the potential hazards of the company's involvement with crypto – and continued to hold on to their stock investments in the tech giant regardless.
More Mitigating Factors
Also taken into account by the Northern District California Court Judge had been the fact that Nvidia's chipsets (GPUs) had in the interim been redesigned in such a way that their ability to glean value from crypto mining was significantly reduced.
Nvidia's latest GPU hardware, the RTX 3060 12 GB chipset, now gets issued standard with an Ethereum mining damper (or "limiter") so as to avoid history repeating itself.