TECH NEWS – The US Securities and Exchange Commission says NVIDIA misled investors by withholding essential information.
NVIDIA’s case shows what a turbulent time it is for the technology sector. The current shortage of chips and electronic components has led to a continued lack of consoles and graphics cards, exacerbated by the entry of new competitors and cryptocurrency miners. At the time, the company seemed to be on the side of gamers with various initiatives and specific restrictions on GPUs, but the green company did not miss the opportunity to make a hefty profit.
The fine amounts to $5.5 million.
How much money is at stake? That is the crux of the matter. According to the latest article in The Verge, the US Securities and Exchange Commission has fined NVIDIA for concealing information about profits from the sale of graphics cards used to mine cryptocurrency. As a result, the tech giant will have to pay $5.5 million for misleading its investors, according to the SEC.
NVIDIA officials have seen a significant increase in sales of gaming graphics cards.
As The Verge recalls, NVIDIA developed a line of CMP graphics cards that were sold exclusively to cryptocurrency merchants. However, the Commission claims that “the company’s sales personnel, in particular in China, reported what they believed to be significant increases in demand for Gaming GPUs as a result of crypto mining.”
In addition, the company did not share profits from sales with shareholders, so they could not have known how much profit was generated from the sale of GPUs to crypto miners: “NVIDIA’s analysts and investors were interested in understanding the extent to which the company’s Gaming revenue was impacted by crypto mining and routinely asked senior management about the extent to which increases in gaming revenue during this time frame were driven by crypto mining.”
NVIDIA did not share the profits from these sales with shareholders.
The Verge adds to the information by reminding us that the changing value of cryptocurrencies makes it difficult to make decisions when investing in a company. After all, NVIDIA’s profit from selling GPUs to cryptocurrency traders does not indicate that this trend will continue for years. The company, for its part, has agreed to curb disclosure failures, though it does not admit wrongdoing.
The chip shortage continues to cause significant difficulties in sourcing next-generation technology components, and it appears that this crisis could last for some time.
Source: The Verge