A U.S. federal judge has granted class-action status to a long-running investor lawsuit against NVIDIA and its CEO Jensen Huang. The plaintiffs allege the company hid the extent of its reliance on cryptocurrency mining for its gaming GPU revenue, totaling more than $1 billion.
Allegations of Downplayed Crypto Exposure, Internal Email Cited
The suit, originally filed in 2018, was dismissed in 2021 but revived on appeal. NVIDIA's attempt to block it at the U.S. Supreme Court failed. Now approved as a class action, the case covers investors who bought NVIDIA stock between August 10, 2017 and November 15, 2018.
Plaintiffs claim NVIDIA recorded the bulk of over $1 billion in crypto-related GPU sales under its “gaming” segment, misleading investors about the risks from crypto market volatility. Jensen Huang is accused of downplaying the true scale of crypto demand. NVIDIA had argued mining was a small part of its business and gaming revenue came primarily from gamers.
A key piece of evidence: an internal email from a senior executive stating the company’s stock price was “maintained at a high level due to previous statements.” The judge called it “particularly persuasive.” After the company issued a corrective disclosure in November 2018, shares dropped roughly 28.5% in two days.
In 2022, the SEC charged NVIDIA with failing to properly disclose mining’s impact on its gaming business. NVIDIA settled for $5.5 million without admitting or denying the allegations.
The court is scheduled to hold a status conference on April 21 to outline the next steps.
From Mining Gold Rush to AI Giant
Back in 2017, demand for mining rigs and GPUs skyrocketed alongside Bitcoin and Ethereum prices. NVIDIA’s GeForce cards were in short supply, leaving gamers empty-handed.
By 2020, the crypto bull run reignited mining fever. NVIDIA responded by launching dedicated CMP mining cards and limiting the hash rate on its RTX 3080. Still, miner demand was ferocious. In Q1 2021 alone, CMP sales hit $155 million, while the global market for discrete GPUs used in mining was about $500 million.
Exactly how much came from miners remained opaque, as NVIDIA lumped mining revenue into its gaming segment. In 2018, total revenue reached $9.714 billion (up 41% YoY), with gaming contributing over $5.5 billion. Notably, mining giant Bitmain’s profits briefly rivaled NVIDIA’s—and NVIDIA was one of its suppliers.
The crypto crash of 2022 then hit hard. GPU sales slumped, inventory piled up, and gaming became a drag on earnings. In 2023, NVIDIA CTO Michael Kagan bluntly said crypto offers “nothing useful for society,” calling ChatGPT the “iPhone moment” for AI.
Since then, NVIDIA has reinvented itself as the dominant “picks and shovels” seller for the AI era. Former mining companies are now pivoting to AI, too — but that's a chapter for another day.