AI giants’ secret past: Nvidia’s old case is reopened, accused of concealing $1 billion in “mining GPU” revenue

Author: Nancy, PANews

Recently, NVIDIA has faced a class-action lawsuit from investors, accused of concealing over $1 billion in cryptocurrency mining revenue, which has attracted market attention.
This prolonged lawsuit has once again refocused the market’s attention on the frenzy of the gold rush back then. The current AI empire NVIDIA was a direct beneficiary of this craze.
Accused of hiding over $1 billion in mining income, the multi-year class-action lawsuit has officially moved forward.
A U.S. federal judge has approved a class-action lawsuit against NVIDIA and its CEO Jensen Huang.
According to the plaintiffs, between 2017 and 2018, NVIDIA concealed the extent to which its gaming graphics card revenue depended on demand from cryptocurrency mining.

The lawsuit was initially filed by investors in 2018 and was dismissed in 2021. After an appeal for reconsideration, NVIDIA’s appeal to the U.S. Supreme Court was denied, and the case has now officially received approval for class-action status.
The plaintiffs believe that NVIDIA generated over $1 billion in cryptocurrency-related revenue through its GeForce gaming graphics cards but largely categorized it under the “gaming business” segment, thereby downplaying the risk disclosures to investors. They allege that CEO Jensen Huang minimized the true scale of cryptocurrency demand at the time. NVIDIA, on the other hand, had consistently claimed that cryptocurrency mining accounted for only a small part of its business, with gaming revenue mainly from gamers.
The plaintiffs point out that this practice exposed the company directly to the risks of cryptocurrency market cycle fluctuations. Especially after the company issued corrective disclosures in November 2018, its stock price fell about 28.5% within two days.
More critically, the court cited an internal email from an NVIDIA vice president as evidence, considering it particularly persuasive. The judge noted that an internal executive had stated, “The company’s stock price remained high thanks to previous related statements,” indicating that such statements influenced the stock price.
In fact, as early as 2022, the U.S. SEC had accused NVIDIA of failing to fully disclose the impact of cryptocurrency mining on its gaming business, believing that its financial reports for two quarters could mislead investors. NVIDIA neither admitted nor denied the SEC’s charges but agreed to pay a $5.5 million fine and settled.
This approved class-action lawsuit covers investors who purchased NVIDIA stock between August 10, 2017, and November 15, 2018. The court plans to hold a case management conference on April 21, where the judge will clarify the subsequent proceedings.
Looking back at the cryptocurrency gold rush, NVIDIA’s mining history
Let’s return to the bull market of 2017. Mining rigs were in high demand, chips were in short supply, and countless miners rushed into Bitcoin mining.
At that time, NVIDIA was best known for its gaming graphics cards. But as the prices of cryptocurrencies like Bitcoin and Ethereum soared, the graphics card market experienced severe shortages, with supply unable to meet demand for a long period. NVIDIA’s GPU products naturally also faced shortages, even making it difficult for ordinary gamers to get one.

By 2020, a new bull market reignited mining enthusiasm. This time, NVIDIA took proactive steps, launching CMP mining-specific cards designed for Ethereum mining and imposing mining performance restrictions on the RTX 3080 aimed at gamers. Yet, even so, the fervent demand from miners was hard to suppress. According to NVIDIA’s disclosures, in the first quarter of 2021, sales of CMP mining chips alone reached $155 million, while the global market for standalone graphics cards flowing into cryptocurrency mining was about $500 million during the same period.
Clearly, this mining boom allowed NVIDIA to earn substantial profits. However, how much of this revenue actually came from miners has always been a mystery. In NVIDIA’s financial reports, mining revenue was categorized under the gaming segment, making it difficult for outsiders to accurately dissect its true structure.
But from a revenue perspective, mining indeed “boosted” NVIDIA at that time. In 2018 alone, NVIDIA’s revenue reached $9.714 billion, a 41% increase year-over-year, with the gaming segment contributing over half (about $5.5 billion). Interestingly, during the same period, the then-newly established mining company Bitmain expanded rapidly, with profits once approaching NVIDIA’s, and NVIDIA was one of its suppliers.
However, this portion of revenue was heavily affected by cryptocurrency cycle fluctuations. After the demand for mining plummeted in 2022, NVIDIA’s sales declined, and inventory surplus became an issue, with the gaming segment becoming a major drag on overall performance; the decline in GPU sales was a key factor. Interestingly, NVIDIA’s CTO Michael Kagan stated in 2023 that cryptocurrencies would not bring anything useful to society, and that the emergence of ChatGPT marked the “iPhone moment” for AI.
Subsequently, NVIDIA’s rise in AI became widely recognized, turning it into the most powerful seller of AI “shovels,” selling new tokens. Meanwhile, the once-thriving mining companies began shifting their focus to AI business.