A couple of years back graphics processing unit designers Advanced Micro Devices Inc (NASDAQ:AMD) and NVIDIA Corporation (NASDAQ:NVDA) witnessed their GPU products experience unprecedented sales boom courtesy of the cryptocurrency mining boom. The companies’ products, originally designed to serve the needs of gaming users, were found suitable to compute the complex mathematical tasks that lay at the center of mining cryptocurrency.
As this boom ended, both NVIDIA and AMD saw their GPU shipments drop and inventories rise, with demand for their products slowing down due to dropping cryptocurrency prices. NVIDIA, for its part, was accused of financial impropriety by trying to shield investors from the true extent of its earnings from crypto products, by incorrectly classifying the revenue stream under Gaming, as opposed to OEM category as it had initially promised.
To that end, NVIDIA is now being sued by investors for misinforming them about the true nature of its dependency on cryptocurrency sales. The suit names senior members of the company’s management, including chief executive Jensen Huang as the defendants, and it is filed on the behalf of all of NVIDIA’s investors.
NVIDIA Sued By Investors For Understating At least $1.1 Billion Of Revenue Earned From Selling Cryptocurrency Products
In addition to Mr. Huang, the lawsuit, which was filed earlier this week, also names NVIDIA’s chief financial officer Collette Kress and the company’s senior vice president of GeForce at the time (current executive vice president) Jeff Fisher as directly responsible for the aforementioned revenue understatement.
To bolster its allegations, the complaints use testimony provided by five former NVIDIA employees. These are a senior account manager in China who left the company in 2017, a senior products…