The Supreme Court has allowed a class-action lawsuit against microchip company Nvidia to proceed.
The lawsuit accuses Nvidia of misleading investors about its past reliance on selling computer chips for mining volatile cryptocurrency.
The big picture: The court’s decision to let the case go forward followed Nvidia’s attempt to shut down the lawsuit, which was based on claims that it did not meet the requirements of a 1995 law meant to prevent frivolous complaints.
The backstory: The lawsuit originated in 2018, led by a Swedish investment management firm. It was triggered by a decline in cryptocurrency profitability, causing Nvidia’s revenues to fall short of expectations and leading to a 28% drop in its stock price.
- In 2022, Nvidia settled with the Securities and Exchange Commission for a $5.5 million fine regarding charges related to the lack of disclosure about the significance of cryptomining as a revenue source.
Driving the news: Despite the legal challenges, Nvidia’s performance in 2024 has been impressive, with its stock price rising by 180% despite facing a China investigation and class-action lawsuit.
- Nvidia has become a significant player in the artificial intelligence sector, attracting tech giants due to its chips and data centers used for AI systems.
