WASHINGTON (AP) — supreme court The class action lawsuit appeared likely to survive Wednesday. Nvidia Misled investors about its dependence on selling computer chips for mining volatile cryptocurrencies.
The justices heard arguments in the tech company’s appeal of a lower court’s decision to allow a 2018 lawsuit led by a Swedish investment management company to continue.
This is one of two high court cases involving class actions against tech companies. Last week, justices debated whether to dismiss a multibillion-dollar investor lawsuit stemming from a privacy scandal against Facebook’s parent company Meta. Cambridge Analytica Political consulting company.
On Wednesday, a majority of the court, which included liberal and conservative justices, appeared to reject arguments made by Santa Clara, California-based Nvidia lawyer Neil Katyal.
Justice Elena Kagan said: “It’s less and less clear why we brought this case and why you should win.”
The lawsuit comes in the wake of declining profitability in cryptocurrencies, which led to Nvidia’s revenue falling short of expectations and the company’s stock price dropping 28%.
In 2022, NVIDIA to resolve Securities and Exchange Commission charges that it failed to disclose that cryptomining was a significant source of increased revenue from sales of graphics processing units manufactured and sold for gaming. , paid a $5.5 million fine. The company admitted no wrongdoing as part of the settlement.
Nvidia has led the artificial intelligence field to become one of the biggest companies on the stock market, as the tech giant continues to invest heavily in its chips and data centers needed to train and operate its AI systems.
This chip-making advantage solidifies Nvidia’s position as a poster child for the artificial intelligence boom, which CEO Jensen Huang calls “the next industrial revolution.” Demand for generative AI products that can create documents, create images and act as personal assistants has been driving sales of Nvidia’s specialty chips over the last year.
Nvidia is one of the most valuable companies in the S&P 500, valued at more than $3 trillion. The company is scheduled to announce its third quarter results next week.
In the Supreme Court lawsuit, the company argued that the lawsuit should be thrown out because investor lawsuits do not comply with the Private Securities Litigation Reform Act, a 1995 law designed to prohibit frivolous claims. There is.
A district court judge had dismissed the complaint before the federal appeals court in San Francisco ruled that the case could proceed. The Biden administration is helping investors.
A decision is expected to be made by early summer.
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Associated Press writer Sarah Parvini in Los Angeles contributed to this report.
