Current:Home > InvestSupreme Court seems likely to allow class action to proceed against tech company Nvidia -ValueCore
Supreme Court seems likely to allow class action to proceed against tech company Nvidia
View
Date:2025-04-16 17:28:49
WASHINGTON (AP) — The Supreme Court on Wednesday seemed likely to keep alive a class-action lawsuit accusing Nvidia of misleading investors about its dependence on selling computer chips for the mining of volatile cryptocurrency.
The justices heard arguments in the tech company’s appeal of a lower-court ruling allowing a 2018 suit led by a Swedish investment management firm to continue.
It’s one of two high court cases involving class-action lawsuits against tech companies. Last week, the justices wrestled with whether to shut down a multibillion-dollar class action investors’ lawsuit against Facebook parent Meta stemming from the privacy scandal involving the Cambridge Analytica political consulting firm.
On Wednesday, a majority of the court that included liberal and conservative justices appeared to reject the arguments advanced by Neal Katyal, the lawyer for Santa Clara, California-based Nvidia.
“It’s less and less clear why we took this case and why you should win it,” Justice Elena Kagan said.
The lawsuit followed a dip in the profitability of cryptocurrency, which caused Nvidia’s revenues to fall short of projections and led to a 28% drop in the company’s stock price.
In 2022, Nvidia paid a $5.5 million fine to settle charges by the Securities and Exchange Commission that it failed to disclose that cryptomining was a significant source of revenue growth from the sale of graphics processing units that were produced and marketed for gaming. The company did not admit to any wrongdoing as part of the settlement.
Nvidia has led the artificial intelligence sector to become one of the stock market’s biggest companies, as tech giants continue to spend heavily on the company’s chips and data centers needed to train and operate their AI systems.
That chipmaking dominance has cemented Nvidia’s place as the poster child of the artificial intelligence boom -- what CEO Jensen Huang has dubbed “the next industrial revolution.” Demand for generative AI products that can compose documents, make images and serve as personal assistants has fueled sales of Nvidia’s specialized chips over the last year.
Nvidia is among the most valuable companies in the S&P 500, worth over $3 trillion. The company is set to report its third quarter earnings next week.
In the Supreme Court case, the company is arguing that the investors’ lawsuit should be thrown out because it does not measure up to a 1995 law, the Private Securities Litigation Reform Act, that is intended to bar frivolous complaints.
A district court judge had dismissed the complaint before the federal appeals court in San Francisco ruled that it could go forward. The Biden administration is backing the investors.
A decision is expected by early summer.
___
Associated Press writer Sarah Parvini in Los Angeles contributed to this report
veryGood! (1299)
Related
- SFO's new sensory room helps neurodivergent travelers fight flying jitters
- Ferry operators around the country to receive $200M in federal grants to modernize fleets
- Vin Diesel Shares How Daughter Hania Similce Honored Paul Walker With Billie Eilish Tribute
- 3 die in Maine when car goes in wrong direction on turnpike, hitting 2 vehicles
- Costco membership growth 'robust,' even amid fee increase: What to know about earnings release
- Adelson adding NBA team to resume of casino mogul, GOP power broker, US and Israel newspaper owner
- Cockpit voice recordings get erased after some close calls. The FAA will try to fix that
- Golden Bachelor’s Gerry Turner Is Getting a Live Wedding Special: Save the Date
- Are Instagram, Facebook and WhatsApp down? Meta says most issues resolved after outages
- Peruvian rainforest defender from embattled Kichwa tribe shot dead in river attack
Ranking
- Juan Soto to be introduced by Mets at Citi Field after striking record $765 million, 15
- UAW begins drive to unionize workers at Tesla, Toyota and other non-unionized automakers
- House on Zillow Gone Wild wins 'most unique way to show off your car collection'
- Indiana announces hiring of James Madison’s Curt Cignetti as new head coach
- Selena Gomez's "Weird Uncles" Steve Martin and Martin Short React to Her Engagement
- College football head coaches at public schools earning millions in bonuses for season
- A new study says about half of Nicaragua’s population wants to emigrate
- 2 Nevada state troopers struck and killed while helping another driver on Las Vegas freeway
Recommendation
Rolling Loud 2024: Lineup, how to stream the world's largest hip hop music festival
Senate Judiciary Committee authorizes subpoenas for Harlan Crow and Leonard Leo in Supreme Court ethics probe
Lionel Messi, Inter Miami announce El Salvador friendly; say 2024 season tickets sold out
The 'Hannibal Lecter facial' has people sending electricity into their faces. Is it safe?
Nearly 400 USAID contract employees laid off in wake of Trump's 'stop work' order
Kari Lake loses suit to see ballot envelopes in 3rd trial tied to Arizona election defeat
Paraguay official resigns after signing agreement with fictional country
UN atomic chief backs nuclear power at COP28 as world reckons with proliferation