The Supreme Court heard arguments in a case involving a class-action lawsuit against Nvidia, a tech company accused of misleading investors about its reliance on selling computer chips for cryptocurrency mining. The lawsuit, initiated by a Swedish investment management firm in 2018, alleges that Nvidia failed to disclose the extent of its dependence on cryptocurrency-related revenue.
The case is part of a broader trend of class-action lawsuits targeting tech companies. Last week, the Supreme Court deliberated on a similar lawsuit against Facebook parent Meta related to the Cambridge Analytica scandal.
Nvidia's stock price experienced a significant decline following a drop in cryptocurrency profitability, leading to lower-than-expected revenues. In 2022, the company paid a $5.5 million fine to settle SEC charges related to its failure to disclose the impact of cryptomining on its revenue growth.
Despite these challenges, Nvidia has emerged as a key player in the artificial intelligence sector, with its chips and data centers in high demand for AI applications. The company's market value exceeds $3 trillion, making it one of the most valuable companies in the S&P 500.
In the Supreme Court case, Nvidia is arguing that the investors' lawsuit does not meet the standards set by the Private Securities Litigation Reform Act of 1995, which aims to prevent frivolous complaints. The Biden administration has sided with the investors in this legal battle.
A decision on the case is expected by early summer, with implications for how class-action lawsuits against tech companies are handled in the future.
