back to article Tales from the crypt-oh: Nvidia accused of concealing $1bn in coin-mining GPU sales as gaming revenue

Nvidia has been accused of under-reporting sales of graphics processors for cryptomining in an effort to distance itself from the volatile market. An amended complaint [PDF], filed this week in California by aggrieved investors, accuses Nvidia of trying to pass off the sales of as much as $1bn in accelerator chips for …

  1. Chris G Silver badge

    Why would investors think a jump in gaming chip sales would be any more long term than any other jump in sales?

    Even the release of a new product that produces a rise in sales doesn't mean it will be long term.

    Nobody with any sense or knowledge of long term investment will base their purchase on short term performance, that is more for differentials traders.

    1. Snake Silver badge

      More long term than any other?

      This. The lawsuit is ridiculous, taking the stance that "You sold $2bn worth of chips, but didn't precisely tell [Wall Street] which type of customers bought which type of product."

      (Directed to the plaintiffs)

      So let me get this straight: nVidia never lied, in any fashion, as to how many units it sold in total. You aren't arguing that point. What you ARE arguing is that nVidia didn't divide out markets to your satisfaction because you wanted to hedge your bets only in one direction, that being yours, and if nVidia wasn't doing precisely what YOU thought they should be doing, you may have double-guessed how much play money you expected your bets to double down on.

      Here's the thing: no company is *required* to split out market analysis for each product sale. Companies deny sales details, customer or product specifics all the time. They do it because scum investors want to play roulette with only the parts of a company that makes them happy - the Carl Icahn scenario. Where a company isn't doing good unless they are doing things MY way.

      So you played only because you wanted to see numbers that made you, exclusively, happy. Damn the fundamentals of the business, are they trendy NOW, I want instant returns. I'll bail if things don't go my way, so make sure they either go my way *or* you give me advanced warning (market analysis, even to the point of future projections).

      My pinky-sized fiddle is playing for you, dear.

      1. Chris G Silver badge

        Re: More long term than any other?

        @Snake.

        You have said exactly what I was too lazy to write.

        1. Jamie Jones Silver badge
          Happy

          Re: More long term than any other?

          ditto

          1. theblackhand

            Re: More long term than any other?

            ^C^V

      2. Jamie Jones Silver badge
        Thumb Up

        Re: More long term than any other?

        Why do companies expect government bailouts, and shareholders expect company bailouts when things go wrong?

        When things go right, you don't see them offering cash in the other direction.

        "Unforseen circumstances" can work both ways.

        1. John Brown (no body) Silver badge

          Re: More long term than any other?

          "the value of your investments may go down as well as up"

          There does seem to be a strange sense that some investors think the stock market is like a bank which pays interest instead of what it actually is, a casino.

          1. Yet Another Anonymous coward Silver badge

            Re: More long term than any other?

            If the costs of your lawyers multplied by the probability you will win is less than the amount you stand to gain = sue

    2. sabroni Silver badge

      re: Why would investors think a jump in gaming chip sales....

      Because gaming revenues are consistently good year on year. Selling into a market like that is very different to selling into cryptocurrency mining.

    3. overunder Silver badge

      While I agree 100% and really don't care at all about any of this....

      1. If Nvidia already distinguishes "gaming", why not "cryptocurrency"?

      2. Didn't Nvidia give really long presentations revolving around cryptocurrency for advertising?

      3. Didn't Nvidia supply locked down software drivers for their chips specifically for cryptocurrency?

      4. Didn't Nvidia specifically sell their hardware Quadro chips to OEM's for cryptocurrency exclusively?

      The above might make it seem like I care about this topic, but I really don't at all. However, it is hard for me to believe Nvidia or any company that did all that would really have no idea what was going on and made the honest mistake of considering crypto sales equal to gaming sales

  2. Robinson

    How the hell is NVIDIA supposed to know what the cards it's customers buy are going to be used for?

    1. SmartAlec

      RE: How does Nvidia know?

      You've seen the new licensing shit they have right? There's going to be an estimate for how much pirated GPU power being tossed around internally.

      1. Cederic Silver badge

        Re: RE: How does Nvidia know?

        What is pirated GPU power? How would you measure it? Who uses it and where do they pirate it from?

    2. vtcodger Silver badge

      How the hell ...

      How the hell is NVIDIA supposed to know what the cards it's customers buy are going to be used for?

      One suspects that NVIDIA's marketing folks might have some notion of what the company's marketplace looks like. If not, why are they on the payroll?

      And lying -- especially to the shareholders that, conceptually at least, own you -- seems a bit iffy.

      But still, in what way have the nice folks who have filed this lawsuit been significantly harmed?

    3. sabroni Silver badge

      Why the hell are they dividing their sales reports into gaming and crypto mining if they don't know what their customers are doing?

    4. DevOpsTimothyC

      Of the card design does not include any video out it's pretty obvious. Additionally If you've got a couple of places (that aren't your typical wholesalers) buying more than 2 or 3 cards at a time, you can be pretty sure it's not a gamer.

      The most graphics cards I've seen in a PC are 3. Most gamers will not have multiple multiple high spec PC's. Keep in mind that at the time this is covering a GeForce GTX 1080 or GeForce GTX 1080 Ti was in the $900-1200 range.

    5. Sid Sinister

      You also have consider that Nvidia's customers are not for the most part the end user, either the cryptocurrency miners or gamers, but the graphics card manufacturers like Gigabyte, PNY Asus, etc who buy the GeForce GPUs and chipsets. Even then most people don't buy direct from the graphics card manufacturers but from retailers whom themselves may buy directly from the graphics card manufacturers or from resellers.

      So lets say I buy a Gigabyte RTX 2080 Super for cryptocurrency mining from Amazon, I don’t have to tell Amazon why I am buying the card for. Amazon can’t tell the reseller it bought the card from what the card is used for as it doesn’t know and even if it did doesn’t have tell. Amazon doesn’t even have to tell the resell that the card was sold. The reseller likewise doesn’t have tell Gigabyte whom in return don’t have to Nvidia. Also passing on this the type of information could be illegal depending the various companies and myself are based and the route the card took to get to me.

      So how would Nvidia know what all the GeForce chips it produced is being used for when it is so far removed from the actual end users?

  3. Lorribot Bronze badge

    South Sea Buble?

    Investors looking to cover up their own lazyness. How the hell would Nvidia know what their customers where using the cards for? Do Tescos know what their customers cook with the chicken breast they sell them or B&Q know what their customers paint with the Dulux they buy?

    Dumb arse lazy people looking to recover losses from their own stupidity of investing in a company and market they know nothing about that over inflated teh price in the first place.

    South Sea Bubble and DotCom bubble spring to mind, you got burnt because you didn't understand what wasd driving the market.

    Tough get over it and move on to your next fragile investment suckers.

    1. Anonymous Coward
      Anonymous Coward

      Re: South Sea Buble?

      Chicken painting is an ancient and noble art, my friend.

      1. Fruit and Nutcase Silver badge
        Alert

        Re: South Sea Buble?

        Whilst at Tesco, pickup some Bleech - then no need to wait for Boris to do a trade deal with Trump to have Chlorinated Chicken

    2. John Brown (no body) Silver badge

      Re: South Sea Buble?

      Is that Michael Bubles sister? Or has he had a daughter and gone for a "celebrity" name for her?

    3. Anonymous Coward
      Anonymous Coward

      Re: South Sea Buble?

      Generally companies do their best to understand that market that they are operating in but it's not always obvious or possible to know everything.

      I worked for a company back in the 1980's that had designed and built a device that performed a new test for a body posture issue. They sold a few of these to various institutions around the world when suddenly the sales went up about 800% to a medical device reseller. The folks running the company loved it for a year until the sales suddenly stopped - after a discussion with a gentleman in New York, at the restaurant that he was shot outside of a week later, they came to the conclusion that the reseller might just have been a money laundering operation.

      Anon and no specific details or names for very obvious reasons.

  4. Anonymous Coward
    Anonymous Coward

    Well you can put what you like in a lawsuit...

    ...but it's another thing to win it.

    I don't think that Nvidia was particularly embarrassed to sell products related to cryptocurrency or blockchain. 95% of startups were blockchain. I am also certain their lawyers and accountants know what you can and don't have to put in accounts to shareholders.

    Looking for the class action against people doing chips for AI in a few years.

  5. HildyJ Silver badge
    FAIL

    Traders deserve what they get

    Investors who bought just before the crash have a profit as Nvidia stock is hitting new highs despite COVID-19.

    Traders who try and jump into and out of the hottest thing lost money. Cry me a river.

    1. Warm Braw Silver badge

      Re: Traders deserve what they get

      I'm afraid anyone who buys shares from an existing shareholder is a trader - the company sees none of your "investment". Perhaps if it did some of the more egregious speculation might be deterred.

      1. James 139

        Re: Traders deserve what they get

        This is entirely one of the reasons why I dont get why stock price is, in general every day terms, equated to a businesses ability to function normally.

        Unless the business needs to issue more stock to raise funds, it is, surely, no different to owning a house in negative equity, in such that it only matters if you are trying to sell the house, it is no reflection on your ability to pay the mortgage and other bills.

  6. Doctor Syntax Silver badge

    "Now, the shareholder class wants to collect damages from the company "

    Shareholders are the company. So basically they're suing themselves in order to get back a fraction of what it'll cost them after the lawyers have taken their whack. Where on Earth do they think the money's going to come from except shareholders' funds? Or do they think the company is going to string a few cards together and whip up some Bitcoin to pay them?

    They should have remembered that the guys who made money out of gold rushes were those who sold shovels.

    1. Snake Silver badge

      Shareholder class

      These are the people who played roulette with the stock market, lost, and are now, essentially, suing the house to get back their money. From the other people, the ones who actually stayed in the game.

      Greed, meet Stupidity. He's the one having a beer with Knucklehead.

    2. Aitor 1

      Scam

      You make a series of high risk investments, some will fail, but fear not, you can just sue them!

      And they already sold the shares

  7. sanmigueelbeer Silver badge
    FAIL

    So Nvidia is being sued by investors for making a profit?

    Did I just bump my head and woke up in an alternate reality?

    1. sabroni Silver badge

      re: So Nvidia is being sued by investors for making a profit?

      What links the 20% loss in share price to the profit?

  8. ThinkingMonkey

    You win some, you lose some.

    The investors "gambled", lost, and now want their money back. Wouldn't we all love to be able to sue Las Vegas for our money back? Bad example, perhaps, but still. The only way for that way of thinking (If I win at handsome odds, I want the money. If I suffer a loss or at least not gain what I thought I would, I want my money back.) to be 100% fair would be that if the investors, upon investing in a later-wildly-successful venture, were only paid back what they invested, with perhaps some pittance of interest.

    1. Chris G Silver badge

      Re: You win some, you lose some.

      All investment, whether it's differentials, shares or stashing gold and money under the mattress, is all gambling and gamblers always blame luck, the weather, the gods or even the woman who read the chicken entrails that day but they never blame themselves.

      That is why successful professional gamblers are few and far between.

  9. adam payne

    Now, the shareholder class wants to collect damages from the company

    But as shareholders you own the company so you are taking money from yourselves.

  10. Sgt_Oddball Silver badge

    If they've sold..

    $1b+ of gamer focused hardware, they've sold $1b+ of gamer focused hardware.... If the owners of this product for a segment decide they want to use it only for CAD workstation stuff.. So what? If its bought by millions of people with no intention to game on the hardware, what difference to the bottom line does it make?

    As with so many things involving stock markets and shares, everyone forgets that nothing is infinite (save for human greed) and this too shall pass given enough time.

    1. Anonymous Coward
      Anonymous Coward

      Re: If they've sold..

      Yeah, it could have easily been an AI fad that faded due to AI not giving results. Investment "problems" would have been the same boom and bust, and NVidia would have had the same "we believe it's sustainable", and then it failed.

      Investors seem to have not done their research, and NVidia hoped (or just knew it would fail, but who backs the failures?) it would continue and the bubble would not burst.

      So really, to minour wrongs, not worth going to court over.

  11. Gustavo Fring
    Happy

    This suit HAS merit

    But surely Crypto is /should be under the gaming umbrella .? I like their products .. generally a lot more power efficient than AMD equiv.

    Disclosure : I have £300 of Bitcoin ETF in my pension .... oooohhh.

  12. Andy 68

    I think most people here are missing the point

    As much as I have no sympathy for the share traders who lost money, people here seem to be missing the fact that the suit is complaining that Nvidia execs *lied to the market* about their business.

    CEO:

    - We have 2 types of customers - Group A and Group B

    - Everyone knows that the GroupB market is ephemeral and will probably implode soon

    - Don't worry - 95% of our sales are to Group A so we're going to carry on making loads of money

    If you read the linked pdf in the article, the quotes in the suit are quite iffy, and do sound as though the CEO is deliberately misleading, if not downright lying to, the market.

    I don't think the SEC takes kindly to that sort of thing, do they? C.f. Musk et.al.

    1. Dan 55 Silver badge

      Re: I think most people here are missing the point

      Do you think investors didn't know what was happening when the cryptomining bubble took off and any half-decent GPU went flying off the shelves?

      The investors say Nvidia was supposed to draw an arbitrary line between sales to Group A and B buying the same GPU X, but how?

      If the investors were sitting on a chair when the music stopped they wouldn't be suing anyone. But they weren't, so they lost that game.

      1. Andy 68

        Re: I think most people here are missing the point

        > Do you think investors didn't know

        If they didn't know then they were wilfully blind. *I* knew, just from reading El Reg. I have no sympathy for them at all.

        > The investors say Nvidia was supposed

        No. That's not what they're saying. They are saying that when the CEO was specifically asked if the bitcoiners were responsible for the huge spike in sales, he said "no".

  13. JohnG Silver badge

    If Nvidia management were hiding anything, it was that miners were ignoring Nvidia's mining gear and using graphics gear intended for gamers instead and that developing the mining gear may have been a waste of time and money.

    Nvidia are rather well known for the graphics cards/chips and the use of their GPUs for cryptocurrency mining was widely reported, even in the mainstream media - how would anyone investing in them be unaware of the mining fad and the probability that this fad would end? I hope they are TTFO by the court and made to pay Nvidia's costs.

  14. tiggity Silver badge

    Nvidia did what they could

    Making mining specific cards showed they tried.

    Not a lot they can do to stop gaming cards being used for mining

    Quite likely a lot of "dual use" e.g. some people thinking I'll get a top end new GPU as as well as better gaming experience I hope to recoup some costs by bitcoin mining and make it more affordable (and when it became clear that it was not a magic path to riches for your average person in the street then "dual use" purchases likely to decline in addition to fall in dedicated miners buying gaming cards)

    I'm sure they had their hunches that some surge was mining related, but coudl nbot really know without wasting a lot of time and money due to their distance from the majority of purchasers

    Disclosure, nothing to do with Nvidia, just get a bit sick of whining share holders - hint shares are a risk

    1. sabroni Silver badge

      Re: just get a bit sick of whining share holders

      So, to be clear, it's ok to lie to share holders because you don't like the way they whine?

  15. Anonymous Coward
    Anonymous Coward

    Weren’t GPUs long surpassed by ASICs for BTC mining at the time this report was published? Perhaps it’s deception so nobody would suspect a major GPU supplier to have a hand in the rise of new digital coins that can only be mined with GPUs.

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