A sign is posted in front of Nvidia’s headquarters on May 10, 2018 in Santa Clara, California.
Justin Sullivan | Getty Images
Nvidia did not disclose how cryptocurrency mining drove growth in fiscal second and third quarters of 2018, which took place in 2017, the SEC said in a filing.
The deal marks the end of a saga in which Nvidia, best known for producing graphics cards for games, found itself with a surprise increase in revenue from cryptocurrency miners who later refused to go intangible. Nvidia declined to comment.
Graphics cards, such as those made by Nvidia, are suitable for mine ethereum. In 2017, ether prices surged from under $ 10 to over $ 800, prompting miners to buy new hardware to cash out.
Nvidia’s gaming category, which is how the company reports those sales, increased by 52% year-on-year in the second quarter of fiscal 2018 (ended June 30, 2017) and by 25% in the following quarter. but Nvidia failed to reveal the cryptocurrency’s effect on that growth, the SEC says.
Nvidia was aware that cryptocurrency mining was driving some of its business, according to the SEC filing.
The company’s sales staff in China at the time believed the increased demand for gaming GPUs was due to miners, and Nvidia’s senior management wanted to pursue the cryptocurrency mining market, according to the SEC filing.
But cryptocurrency may have ended up being a distraction for Nvidia as demand grew for its intended-use graphics cards, games, and artificial intelligence.
In 2021, Nvidia released new cards intended for mining called Cryptocurrency Mining Processor and has added software to its graphics cards to prevent them from being used for mining. Nvidia’s graphics cards were extremely scarce in 2020 and 2021 as pandemic-driven gaming demand prompted users to upgrade their home gaming PCs.
However, CMP sales have sharply decreased since their introduction. In the most recent quarter, CMP’s revenue was only $ 24 million, down from $ 266 million in the August 2021 quarter.
“Our GPUs are capable of mining cryptocurrencies, although we have limited visibility into how much this affects our overall GPU demand,” Nvidia CFO Colette Kress said in an earnings comment in February.