On Wednesday, the U.S. Supreme Court dismissed a lawsuit filed by investors against artificial intelligence chip giant Nvidia, allowing most of the claims to continue in a lower court.
In an unsigned ruling, the court dismissed the case as “granted without prejudice,” meaning that the judges no longer believe the dispute contains legal issues worthy of their attention right now.
Nvidia shares were up about 2.7% in midday trading.
During oral arguments last month, some judges expressed concern about whether they should review the case. Judge Elena Kagan said in a conversation with Nvidia’s lawyer that “it just seems to me that you’re asking us to engage in an analysis that we’re not very well versed in and that we didn’t expect to do when we took this case.”
A representative of Nvidia said that the company would prefer that the court of first instance confirm the dismissal of the case, but is fully prepared to continue its defense.
The case stems from allegations that Nvidia underreported the amount of money it earned from the cryptocurrency boom more than five years ago. Investors claimed that Nvidia classified revenue that it knew came from cryptocurrency mining as revenue from video game graphics, thereby misleading them.
The lawsuit alleged that Nvidia underreported its revenue from such sales by more than $1.1 billion over a 15-month period from May 2017 to July 2018.
In 2022, Nvidia agreed to pay $5.5 million to the Securities and Exchange Commission for improper disclosure of its business with the cryptocurrency industry.
