A U.S. court has allowed a lawsuit against Nvidia and its CEO Jensen Huang to move forward. Investors say the company failed to disclose crypto mining-related revenue, which is over $1 billion.
Nvidia provided misleading revenue reporting
The lawsuit represents investors who purchased Nvidia stock between 2017 and 2018. The plaintiffs alleged that the company concealed over $1 billion in GPU sales linked to crypto mining. Instead, they showed proof of revenue under their gaming business.
The court found that Nvidia failed to demonstrate that its alleged lack of disclosure had no impact on its stock price. They classified the case under class action, providing a group of investors the right to fight the case together.
Role of crypto mining in Nvidia’s revenue model
2017 to 2018 saw a boom in the crypto industry, which led to more miners using Nvidia’s graphics cards for mining crypto. The issue escalated as they failed to show how much of the sales revenue came from crypto mining. With the numbers increasing in the gaming division, it created a misleading image of Nvidia’s business model, portraying a stronger image for that sector.
However, when the crypto market was hit, there was a drastic drop in the company’s stock, raising an alarm amid the investors. The case mirrors a similar case where the U.S. Securities and Exchange Commission (SEC) announced a $5.5 million settlement with NVIDIA Corporation for the failure to disclose adequate information on the impact of cryptocurrency mining on its gaming business.
What could AGI mean for Nvidia and its investors?
Huang had recently discussed Nvidia achieving Artificial General Intelligence (AGI) during a podcast, answering the question, ‘When will systems as equal as the human mind emerge?’ His response split the investor sentiment with both speculation and fear.
He had claimed, in the interview, “I think we’ve achieved AGI.” This could mean AI now has the capability to perform or even outperform humans in a wide range of tasks. He also suggested that AI could even run a full-fledged company.
For crypto traders, the “NVIDIA AGI” narrative matters because it will mean a future where AI systems become far more powerful, autonomous, and resource-hungry.
If NVIDIA drives the growth of advanced AI, demand for computing power will also exceed what is currently supplied, creating the need for decentralized and token-powered networks to step in.
With AI now driving a new wave of demand for GPUs, investors appear more cautious. The concern is not just about growth but about transparency. Investors are questioning the source of revenue and if the given data are accurately represented. As per reports, a new hearing is scheduled for April 21.
