The legal outlook for the technology giant Nvidia has become complex following the decision of a federal judge in California, in the United States, to certify a class action lawsuit filed by investors.
The lawsuit alleges that the company and its CEO, Jensen Huang, deliberately concealed that a substantial portion of their revenue depended on sales of graphics processors (GPUs) that were used in cryptocurrency mining between 2017 and 2018.
This lack of transparency would have exposed shareholders to unreported market volatility, camouflaged under the company’s video game segment.
The genesis of the legal conflict lies in the omission of financial information by Nvidia that amounts to more than $1 billion in hardware sales that are usually linked to mining activity.
According to the accusation, Nvidia presented these figures as income from the “Gaming” sectorwhen in reality the driving force behind said demand was the rise of digital currencies of that period.
The situation became critical at the end of 2018, when the bitcoin market suffered a severe correction. The end of profitability for many miners caused a massive inventory glut, which led to a 28.5% drop in the value of Nvidia shares after the operational reality was revealed in November of that year.
Judge Haywood S. Gilliam Jr. basis his decision on internal evidence that complicates the company’s position. Among the documents analyzed, an email from an Nvidia vice president stands out, suggesting that the share price was kept artificially high thanks to the board’s optimistic statements. which omitted the real risk of exposure to the digital asset sector.
The judge determined that the company could not demonstrate that its income statements had no impact on the stock price.
This certification allows all investors who purchased Nvidia shares between August 10, 2017 and November 15, 2018 to act as a unified block. This structure facilitates progress towards an oral trial, surpassing the stage of individual claims.
It is worth remembering that Nvidia already faced previous sanctions for these events. In 2022, the United States Securities and Exchange Commission (SEC) imposed a fine of $5.5 million on the firm for not adequately disclosing the impact of mining on its business model, as reported by CriptoNoticias.
While Nvidia consolidates its current leadership in the development of infrastructure for artificial intelligence (AI), this judicial process revives the shadows of its past management.
Furthermore, the certification of this lawsuit establishes a critical precedent for technology companies like this, keeping the market awake until the hearing on April 21, 2026, where the roadmap for a trial that could redefine the transparency obligations for these companies will be drawn up.