News SEC Fines Nvidia $5.5 Million for Insufficient Crypto Disclosures

[Admin]

The Securities and Exchange commission charged that Nvidia's disclosures about the effects of cryptomining on its gaming business were inadequate.

SEC Fines Nvidia $5.5 Million for Insufficient Crypto Disclosures : Read more

 

[digitalgriffin]

This is a slap on the wrist.

The question becomes "Does NVIDIA have first hand knowledge of how many of their GPUs are being used for mining?" We already know NVIDIA looks at a lot of what you use your PC for through the "NVIDIA experience" program. AMD does the same thing. "Oh you play these games? Let me recommend more expensive products in our lineup to make your game better."

A simple binary check of the calling program for known miners is easy. But that wouldn't cover custom drivers by mining farms. So you would have to assume all those are mining GPUs. For example: "54 million out of 80 million are used for mining on Linux/Windows using official drivers. 125 million are using custom drivers so we assume they are used for mining. That gives 87% mining use"

 

[InvalidError]

How is Nvidia supposed to accurately represent the proportion of its GPUs going to crypto? At best, it is the AIBs doing bulk sales to large crypto farms and Nvidia's reporting beyond crypto-specific ASIC part numbers cannot be more accurate than whatever it gets from AIBs.

 

[Sleepy_Hollowed]

The jpeg receipts and the pump and dump Monopoly money is tanking, so nvidia is getting hit about what they should’ve been tracking the moment they discovered miners used this for.

it doesn’t help that they didn’t care to throttle those sales or have an actual channel to make those sales, or mandate resellers to track those.

 

[hotaru251]

lul.....5M dollars?

might as well of asked for $5 as thats what it feels like to them.

 

[digitalgriffin]

How is Nvidia supposed to accurately represent the proportion of its GPUs going to crypto? At best, it is the AIBs doing bulk sales to large crypto farms and Nvidia's reporting beyond crypto-specific ASIC part numbers cannot be more accurate than whatever it gets from AIBs.

If NVIDIA ships 100,000,000 chipsets, then that's 100,000,000 chipsets they have to account for. They know how many they produce. The software will report what it's used for along with a serial #. It's not rocket science. Anything that doesn't report has to be assumed to be used for mining as it's using custom drivers commonly used by miners.

The point is the market wants to know what part of NVIDIA's market is actually gamers. Gamers will use official drivers. Official software will report this. So if only 1,000,000 report back to home as gaming only, then that's 1%. The gamer market is a lot less vulnerable to fluctuations compared to mining valuations.

 

[Phaaze88]

Yeah, what the heck? Multi billion dollar company, ~Hello!
What's a few million that they'll make back in a month...

This whole thing is LULZ...

 

[Metteec]

What's a few million that they'll make back in a month...

Times up. Actually, they actually made it back in 4.5 hours. Last year, they earned income of $9.8 billion, which is $1.125 million per hour.

 

[InvalidError]

If NVIDIA ships 100,000,000 chipsets, then that's 100,000,000 chipsets they have to account for. They know how many they produce. The software will report what it's used for along with a serial #. It's not rocket science. Anything that doesn't report has to be assumed to be used for mining as it's using custom drivers commonly used by miners.

AFAIK, Nvidia's drivers don't phone home. Every instance I could find of "Nvidia drivers phoning home" are related to GeForce Experience and you can simply choose not to install that.

 

[digitalgriffin]

AFAIK, Nvidia's drivers don't phone home. Every instance I could find of "Nvidia drivers phoning home" are related to GeForce Experience and you can simply choose not to install that.

Last I checked, GeForce experience is almost mandatory now. Automated driver updates, and things like shadowplay require it.

 

[InvalidError]

Last I checked, GeForce experience is almost mandatory now. Automated driver updates, and things like shadowplay require it.

It may feel mandatory to you. They are don't-cares for me. The only time I installed Experience on my PC was the first time I installed my GTX1050 in my previous PC and that was long before it required an account. That's when I realized I wasted 250MB on something I had no use for, removed it and never bothered again.

 

[hotaru251]

Last I checked, GeForce experience is almost mandatory now. Automated driver updates, and things like shadowplay require it.

which miners wont use.

they'll at msot grab soemthing like afterburner, undervolt gpu, and then set and forget.

 

[abufrejoval]

Last I checked, GeForce experience is almost mandatory now. Automated driver updates, and things like shadowplay require it.

Never installed it. Actually I'd guess it would fail to install on some of my workstations, which run a Windows server edition. I typically just install CUDA releases, use the driver that comes with those, which isn't updated that often.

Works for Linux, too. And I don't want anyone to know, that I use the GPUs I bought for machine learning every now and then also for a game. Even managed to run a game on a headless V100 with VirtGL, but it wasn't much fun at several hundred kilometers distance from the datacenter: latencies are less forgiving than bandwidth.

 

[Deleted member 14196]

This is a slap on the wrist.

The question becomes "Does NVIDIA have first hand knowledge of how many of their GPUs are being used for mining?" We already know NVIDIA looks at a lot of what you use your PC for through the "NVIDIA experience" program. AMD does the same thing. "Oh you play these games? Let me recommend more expensive products in our lineup to make your game better."

A simple binary check of the calling program for known miners is easy. But that wouldn't cover custom drivers by mining farms. So you would have to assume all those are mining GPUs. For example: "54 million out of 80 million are used for mining on Linux/Windows using official drivers. 125 million are using custom drivers so we assume they are used for mining. That gives 87% mining use"

That’s why I opt out of all of those stupid programs and only use the bare drivers

 

[renz496]

Last I checked, GeForce experience is almost mandatory now. Automated driver updates, and things like shadowplay require it.

If you want to use those feature. Else you will be just fine to skip GFE. hence the point of nvidia make it as an optional install in the driver package instead of "required". Shadowplay? I think for the most part it is much better to use third party software like OBS to do it. In fact ever since they officially work with OBS developer to optimized their Nvenc for the software nvidia did not really talk about shadowplay in their marketing anymore.

 

[bigdragon]

What a joke. The SEC fine is far less than what Nvidia makes IN A DAY -- a SINGLE day. That fine needs a lot more zeros added to it and fault applied instead of this usual no-fault BS. That $5 million fine won't even pay for a single pylon in a new road bridge or half a mile of new transit rail.

In lieu of a fine, the SEC should make Nvidia send every gamer a 3080 GPU. We know those were the mining platform of choice during the height of the crypto craze. I'm really tired of regulators not putting teeth on their enforcement actions against the biggest corporations.

 

[InvalidError]

What a joke. The SEC fine is far less than what Nvidia makes IN A DAY -- a SINGLE day. That fine needs a lot more zeros added to it and fault applied instead of this usual no-fault BS.

Most RTX GPUs are assembled, packaged, distributed and sold by third-parties Nvidia has little to no insight into. I'm pretty sure Nvidia could win on appeal by simply saying it doesn't have access to reliable data on what the ultimate fate of its RTX GPUs is since only cards used with GeForce Experience have telemetry.

 

[bigdragon]

Most RTX GPUs are assembled, packaged, distributed and sold by third-parties Nvidia has little to no insight into. I'm pretty sure Nvidia could win on appeal by simply saying it doesn't have access to reliable data on what the ultimate fate of its RTX GPUs is since only cards used with GeForce Experience have telemetry.

Two things.... First, I blame all players in the GPU production and sales process for having made it so hard for gamers to get GPUs at prices appropriate for a market where people are using the GPU specifically for gaming and content creation instead of having to mine crypto with it just to cover part of the cost. For longer than the first year after release, you could overpay for a GPU and then get money back via mining revenues. Now, you just overpay. I blame Nvidia, AMD, Zotac, A$U$, Sapphire, BestBuy, Newegg, Amazon, and all the other players. They all will happily do the Comcast transfer and shift blame onto someone else. Nope. No excuses. No shifting blame. They're all at fault. I'd love to see them all get fined.

Second, I'm not so sure Nvidia has such little insight into where their products are going. Large, single-source, specialized producers like Nvidia can exert significant control over their production and distribution partners. I would expect them to have metrics to assess different sources of demand -- professional, gamer, crypto, and more. I do agree that Nvidia would likely use the excuse of the tracking data not being reliable because it was populated by third parties.

 

[spongiemaster]

Basically the whole things says the SEC looked into it and didn't find anything of interest, so here is a token fine just to say we checked in on this. It's very likely Nvidia understated their mining revenue, but as InvalidError stated, there's no way to prove by how much, so there's no point in trying to bury Nvidia with a huge fine here as they will simply appeal the decision and win, wasting everyone's time and money on legal fees. AMD claimed in 2018 that only 10% of their revenue was from mining. Considering no body wanted their GPU's then for anything but mining, they were clearly lying too unless only 10% of their revenue came from GPU's.

 

[spongiemaster]

Two things.... First, I blame all players in the GPU production and sales process for having made it so hard for gamers to get GPUs at prices appropriate for a market where people are using the GPU specifically for gaming and content creation instead of having to mine crypto with it just to cover part of the cost. For longer than the first year after release, you could overpay for a GPU and then get money back via mining revenues. Now, you just overpay. I blame Nvidia, AMD, Zotac, A$U$, Sapphire, BestBuy, Newegg, Amazon, and all the other players. They all will happily do the Comcast transfer and shift blame onto someone else. Nope. No excuses. No shifting blame. They're all at fault. I'd love to see them all get fined.

And no one involved in the industry cares. The job of these companies is to maximize revenue not make "gamers" happy. The gamers will come back when the market settles back down, so no need to be concerned about their complaining. There is absolutely no legal obligation for these companies to make sure certain customers get their computer parts. It really takes an above and beyond level of entitlement to think otherwise.

 

[InvalidError]

AMD claimed in 2018 that only 10% of their revenue was from mining. Considering no body wanted their GPU's then for anything but mining, they were clearly lying too unless only 10% of their revenue came from GPU's.

As I wrote earlier, Nvidia only knows what their partners tell them. It is entirely possible that AMD's partners only reported 10% of their sales as GPU-mining to AMD. The first time around, a huge chunk of sales happened before anyone knew GPU-mining would be half the thing it turned into.