AI Giants' Secret Past: Nvidia's Old Case Reexamined, Accused of Concealing $1 Billion in "Mining GPU" Revenue

Author: Nancy, PANews

Recently, NVIDIA has faced a collective lawsuit from investors, accused of concealing over $1 billion in cryptocurrency mining revenue, drawing market attention.
This long-standing lawsuit brings the market’s focus back to the frenzied gold rush of that time. The current AI empire, NVIDIA, was a direct beneficiary of this craze.
Accused of hiding over $1 billion in mining revenue, and with years of collective litigation now officially progressing.
A U.S. federal judge has approved a collective 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 cryptocurrency mining demand.

The lawsuit was initially filed by investors in 2018 and was dismissed in 2021. Following an appeal for a retrial, NVIDIA’s appeal to the U.S. Supreme Court was not accepted, and the case has now officially received approval for collective litigation.
The plaintiffs contend that NVIDIA achieved over $1 billion in cryptocurrency-related revenue through its GeForce gaming graphics cards but accounted for most of this in the “gaming business” sector, thereby downplaying risk warnings to investors. Investors allege that CEO Jensen Huang downplayed the true scale of cryptocurrency demand at that time. NVIDIA had previously claimed that cryptocurrency mining accounted for only a small portion of the company’s business, with Gaming revenue primarily coming from gamers.
The plaintiffs point out that this practice exposed the company directly to the risks of fluctuations in the cryptocurrency market cycle. Especially after the company made corrective disclosures in November 2018, its stock price fell by approximately 28.5% within two days.
More importantly, the court cited an internal email from a NVIDIA vice president in its ruling, considering it particularly persuasive evidence. The judge noted that an internal executive had stated, “The company’s stock price has remained high thanks to previous relevant statements,” indicating that those comments impacted the stock price.
In fact, as early as 2022, the U.S. SEC had accused NVIDIA of not adequately disclosing the impact of cryptocurrency mining on its gaming business, suggesting that its financial reports for two quarters may have misled investors. NVIDIA neither admitted nor denied the SEC’s allegations but agreed to pay a $5.5 million fine and reached a settlement.
The approved collective lawsuit covers investors who purchased NVIDIA stock from August 10, 2017, to November 15, 2018. The court plans to hold a case conference on April 21, during which the judge will clarify the subsequent hearing process.
NVIDIA’s Mining History During the Crypto Gold Rush
Let’s go back to the bull market of 2017. Mining rigs were snatched up frantically, chip supply was insufficient, and countless prospectors rushed to Bitcoin mining.
At that time, NVIDIA was best known for its gaming graphics card business. However, as the prices of cryptocurrencies such as Bitcoin and Ethereum skyrocketed, the graphics card market faced severe shortages, with NVIDIA’s GPU products also in short supply, making it difficult for ordinary gamers to find a card.

By 2020, a new bull market reignited mining enthusiasm. This time, NVIDIA took proactive steps, launching CMP mining cards specifically designed to meet the unique demands of Ethereum mining and imposing mining performance limitations on the RTX 3080 aimed at gamers. Yet, even so, it was difficult to curb miners’ fervent demand. According to NVIDIA’s disclosures, in the first quarter of 2021 alone, CMP mining-specific chips generated sales of $155 million, while the global market for independent graphics cards flowing into cryptocurrency mining was about $500 million during the same period.
It is evident that this mining craze allowed NVIDIA to reap substantial profits. However, how much of this revenue came from miners has always been a mystery. In NVIDIA’s financial reports, mining income was categorized under the gaming sector, making it difficult for outsiders to accurately dissect its true structure.
From a revenue perspective, mining indeed “lifted” NVIDIA at that time. Just in 2018, NVIDIA’s operating revenue reached $9.714 billion, a 41% year-over-year increase, with the gaming business contributing more than half (approximately $5.5 billion). Interestingly, during the same period, the mining company Bitmain, which had been established only a few years earlier, was expanding rapidly, with profits at one point approaching those of NVIDIA, of which NVIDIA was one of its suppliers.
However, this portion of revenue was significantly affected by the fluctuations of the cryptocurrency cycle. After the mining demand plummeted in 2022, NVIDIA’s sales and inventory surplus also declined, with the gaming business becoming a primary drag on its overall performance, and the decrease in GPU sales being one of the important reasons. Interestingly, NVIDIA’s CTO Michael Kagan openly stated in 2023 that cryptocurrency would not bring anything useful to society, with the emergence of ChatGPT being the “iPhone moment” in the AI field.
Subsequently, NVIDIA’s story of rising in AI became widely known, becoming the strongest seller in the AI era, selling new tokens. Meanwhile, the once winning mining companies began to shift their focus towards AI business.