Monday, May 18th 2020
NVIDIA Investors Claw Back at Company, Claiming $1 Billion Mining GPU Revenue Hidden Away in the Gaming Division
NVIDIA investors have recently filed a suit against the company, claiming that NVIDIA wrongfully detailed its revenue indicators between departments. The main point of contention here is that investors claim NVIDIA knowingly obfuscated the total value of the crypto market boom (and subsequent bust) from investors, thus painting a picture of the company's outlook than was different from reality (making demand for the Gaming division look higher than it was in reality) and exposing them to a different state of affairs and revenue gains than they expected. The investors say that NVIDIA knew that a not insignificant number of its graphics cards sold between 2017 and 2018 was being bought-up solely for the purpose of crypto mining, and that the company knew this (and even marketed GPUs specifically for that purpose).
The crypto mining boom had miners gobbling up all NVIDIA and AMD graphics cards that they could, with both companies seemingly increasing production to meet the crypto mining bubble demand. However, due to the economics of crypto mining, it was clear that any profits derived from this bubble would ultimately open the door to an explosive logistics problem, as miners offloaded their graphics cards to the second-hand market, which could ultimately harm NVIDIA's financial book. Of course, one can look at NVIDIA's revenue categories at the time to see that crypto would hardly fit neatly into either the Gaming, Professional Visualization, Datacenter, Auto, or OEM & IP divisions.
Sources:
The Register, via Tom's Hardware
The crypto mining boom had miners gobbling up all NVIDIA and AMD graphics cards that they could, with both companies seemingly increasing production to meet the crypto mining bubble demand. However, due to the economics of crypto mining, it was clear that any profits derived from this bubble would ultimately open the door to an explosive logistics problem, as miners offloaded their graphics cards to the second-hand market, which could ultimately harm NVIDIA's financial book. Of course, one can look at NVIDIA's revenue categories at the time to see that crypto would hardly fit neatly into either the Gaming, Professional Visualization, Datacenter, Auto, or OEM & IP divisions.
37 Comments on NVIDIA Investors Claw Back at Company, Claiming $1 Billion Mining GPU Revenue Hidden Away in the Gaming Division
Glad the bubble burst.
IMO, the investors should back up their claims with actual legal documentation that shows how many GPUs were sold for mining purposes, and not simply educated guesses or "market research".
I know it's not that simple. But there are many of us here who struggled with AMD and Nvidia GPU prices because of the mining surge. And to think investors were blind to this is simply as fraudulent as Nvidia's accounting. They invested, knew what was going on, and got burnt. Every-freaking-person knew where those sales were going. So did the investors.
Overall, my point is: everyone knew that a mining bubble was going on, and a lot of people tried to ride the wave and got burned. This is no different, and investors are trying to shift the blame on Nvidia.
While the enthusiasts on forums might have enough knowledge not to install the worst offender of them (GeForce Experience), it gets installed by default and most people install whatever goes with default installation, they don't know any better. People on these and other forums who actually have a clue on these things are just a drop in the ocean of users who don't.
Although all these cards get back into the gaming ecosystem anyway after serving their sentence in the crypto-mines, but skewed number generate skewed projections and I guess this is basis enough for some people that rode the crypto train a bit too long and this is the way they are trying to get some of that money back.
Also in other news: Water is wet, sky is blue, grass in green and big corpos lie, big money is still greedy.
I would expect this case to be thrown out of court because of unreliable/incomplete data, if nothing else.
(And again, I can't stress this enough, most people install whatever goes in by default, not what they need or even want. most people aren't like us on these forums who actually have a clue on these things. It's not like most of the miners are some robust companies with top notch IT departments )