A sign was placed in front of Nvidia’s headquarters on May 10, 2018 in Santa Clara, California.

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Nvidia will pay $ 5.5 million as part of agreement with the SEC that it has not properly informed investors about how cryptocurrency miners are stimulating demand for their graphics cards.

Nvidia has failed to reveal how cryptocurrency extraction led to growth in the second and third fiscal quarters of 2018, which took place in 2017, according to SEC documentation.

The agreement marks the end of a saga in which Nvidia, best known for its graphics card industry, found itself with a surprising increase in cryptocurrency diggers’ revenue, which later refused to be insignificant. Nvidia declined to comment.

Graphics cards like Nvidia’s are great for ethereum digging. In 2017, ether prices rose from below $ 10 to over $ 800, prompting miners to buy new hardware to cash in on money.

Nvidia’s gaming category, which accounts for these sales, grew 52% year-over-year in the second quarter of fiscal year 2018 (which ended June 30, 2017) and 25% next quarter – but Nvidia failed to reveal the effect of cryptocurrency on this growth, says the SEC.

Nvidia is aware that cryptocurrency mining is a driving force in its business, according to SEC documentation.

The company’s sales officials in China at the time believed that the increase in demand for gaming graphics processors was due to miners, and Nvidia’s top management wanted to go after the cryptocurrency market, according to SEC documents.

But cryptocurrency may have become a distraction for Nvidia as demand for its graphics cards grows for their purpose, gaming and artificial intelligence.

In 2021, Nvidia released new digging cards called the Cryptocurrency Mining Processor and added software to its graphics cards to prevent them from being used for digging. Nvidia’s graphics cards were in short supply in 2020 and 2021, as demand for games caused by the pandemic prompted consumers to upgrade their home gaming computers.

However, CMP sales have declined sharply since their introduction. In the last quarter, CMP’s revenue was only $ 24 million, down $ 266 million in the August 2021 quarter.

“Our GPUs are capable of digging for cryptocurrency, although we have limited visibility into how much this affects our overall demand for GPUs,” Nvidia CFO Colette Kress said in a comment on earnings in February.


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