A group of investors accused US GPU maker Nvidia of misrepresenting its inventory of graphics cards (GPUs). District judge Haywood S. Gilliam Jr. dismissed the lawsuit yesterday, citing unsettled arguments against the technology company.
The U.S. judge concluded that Nvidia's revolting investors could not prove that the company knowingly published false information about its inventory of GPUs that are used to develop computer graphics in video games and to mine cryptocurrencies.
The plaintiffs' allegations were based on the findings of the blockchain consulting firm Prysm Group. However, the judge said Prysm did not provide many details that could prove that the data used in his report to analyze Nvidia's financial reports was reliable.
Nvidia's expansion into crypto mining
Nvidia's shareholders started filing lawsuits against the company in December 2018 after it reported disappointing earnings and suffered a 29% drop in share price.
The lawsuits show that investors weren't satisfied that Nvidia was expanding its crypto-GPU production at the expense of the gaming market. As the lawsuit suggests, the U.S. technology company experienced an "unusual problem" in early 2017 when its flagship GPU called GeForce was sold in bulk to crypto-miners rather than gamers.
With this in mind, Nvidia launched a new chip specifically designed for crypto mining, known as Crypto SKU. Still, the miners still preferred the GeForce chip, which made Nvidia's earnings skyrocket.
The company's executives erroneously attributed the increase in revenue to the higher demand from gamers, while informing analysts that the majority of the revenue related to crypto mining is generated by the Crypto SKU.