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Lawsuit Claims Nvidia Execs Concealed Serious Flaw
snydeq writes "A lawsuit filed in a California court on Tuesday alleges Nvidia concealed the existence of a serious defect in its graphics-chip line for at least eight months 'in a series of false and misleading statements made to the investing public.' The lawsuit contends that Nvidia CEO Jen-Hsun Huang and CFO Marvin Burkett knew as early as November 2007 about a flaw that exists in the packaging used with some of the company's graphics chips that caused them to fail at unusually high rates. Nvidia publicly acknowledged the flaw on July 2, when it announced plans to take a one-time charge of up to $200 million to cover warranty costs related to the problem. That announcement caused Nvidia's stock price to fall by 31 percent to $12.98 and reduced the company's market capitalization by $3 billion, the lawsuit said. The lawsuit seeks class-action status against Nvidia and unspecified damages."
Didn't this already happen? Or is this just Deja Vu all over again? I could have sworn I heard about this lawsuit several weeks ago.
I had an nVidia 8800GT card fail prematurely early this summer. I was pleased with its performance, other than the failure, so I picked up the newer version of the same card, from a different manufacturer. Unfortunately that was the middle of June :(
So odds are high that this card is going to die early too. And of course I don't have receipts for either card at this point, but if there's a chance at recouping some of my investment, I'd sign up.
-Rick
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
If the lawsuit is successful, and Nvidia has to pay out damages, then Nvidias stock will drop even further. So who sues the suer for making Nvidia's stock drop the second time? Anyone? Beuller?
Modding Trolls +1 inciteful since 1999
which specific chips are effected?
according to this it seems to be laptop graphics http://mobile.slashdot.org/article.pl?sid=08/08/01/0142219&tid=128
what about AGP & PCIe Desktop graphics cards?
Politics is Treachery, Religion is Brainwashing
This kind of lawsuit is what's supposed to make "capitalism" work ... corrupt businesses being actually held accountable for shady dealings.
I hope it bankrupts them.
Right, so last October I bought a FL90, anyone who knows what it is probably knows it have a 8600M GT card in it, supposedly one of the cards that fail, but now, almost a year after, with the laptop never ever even been shutdown for longer then 6h, seldom rebooted and it still works flawlessly, and always have done, I've had no issues at all, but since it's the thermal packing on the cards that fail according to what I've understood, perhaps the fact that I never turn the laptop off have helped my card survive?
nVidia is facing a lot of competition now. AMD/ATI has come out with a lot of really good cards The 38xx, 48xx, and the new low end 46xx have all been really good cards and forced nVidia to drop their prices.
Crossfire now seems to work better than SLI and Intel is supporting Crossfire in some of it's chip sets.
Now they have what seems to be the nVidia version of the red ring of death.
I hope that they get things going again. I am a pretty happy nVidia customer. I have a motherboard with an nVidia chipset that works great and my wife and I use nVidia graphics cards. But my next graphics card will probably be an ATI as will be the next motherboard I buy.
That being said I do wish nVidia well. I am sure they can get their act back together.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
These stories keep on referencing the packaging being at fault...
Now I'm no electrical engineer but when you take a working chip and put it in a machine it seems a little odd to blame the packaging it came out of for higher than normal failure rates if it works initially.
Maybe "packaging" refers to the way the actual chips are placed into the material around them? Although it seems like a very odd way of wording it as to me packaging implies something that is discarded.
If someone could explain in non-layman's terms what exactly the problem was I would much appreciate it.
"Won't anyone think of the corporations?"
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
Let's see, a securities case or class action lawsuit where the plaintiffs claim that the defendant deliberately did something evil.
Ho hum?
This is news?
9 out of 10 of these cases just quietly die after an initial round of discovery proves that the plaintiffs, indeed, have no case.
This is my sig.
It doesn't work that way. The shareholders are punished for buying a stock in a company that doesn't open source its drivers.
Oo! Oo! Let me add one: it's because Bush is still in office.
There! We got a post promoting F/OSS and bashing Bush!
What are the chances that anyone is actually going to get a new card out of this? If the lawsuit gives out replacement cards, then NVIDIA goes bankrupt replacing them all. And if the result is cash, how many pissed off NVIDIA card-owners will switch to ATI instead? And then NVIDIA goes bankrupt. Either way, if you own stocks, get out now. And if you work for NVIDIA? Brush off your resumé...
I have a broker 8800gs on my desk and a working 3870HD that rocks in my machine.
Lead solder works better and it is more stable at higher temperature, the shit they have to use now is more prone failure at higher temperatures which GPUs tend to produce a lot of.
If we should be suing anyone it is the fucking people that bitch about lead and even other chemicals that naturally exist in nature.
If nVidia is spending $200 million to cover these faulty items under the warranty, then why file a law suit? If your card is out of warranty, then nVidia has no legal obligation to fix it. That's what a warranty means. It might be frusrating, but if they warrant the item for 1 year and it fails in 3 years then I don't see why they are liable.
Of course, I have one of these bad chips in my MacBook Pro, so hopefully it will fail within the 2 and a half years I have left and they will fix it. If not, I'll be crying too - but probably not suing.
Buy from a good partner. One of the good things about nVidia is they seem to have some quality partners. eVGA and BFG seem to be the best I've seen. They both seem to offer lifetime warranty. They also offer a step up program for like 3 months. This means if you buy a card, and then a new model comes out, or you buy a lower end card and decide you need more power, you send back your old card, pay them the difference, and they'll give you the new one.
At any rate, buy from a good partner and failures shouldn't be a problem as if it does fail, they'll simply replace the card.
This seems to be another marginal use of the class action by attorneys looking for an easy payday while the rest of us all get cheques for $0.33 and graphics card prices go up by a couple of dollars to compensate (aka the lawyer tax). It is not as if ALL your data is going to be lost if your graphics card suddenly fails and unless you live out in the boondocks there is probably somewhere not too far away where you can get a replacement the same day. Unless nVidia refuses to replace fried cards or reimburse customers I really do not see the need for a class action lawsuit. Besides, are businessmen (who might want to sue for loss of business) likely to be using GeForce 8800 graphics cards in their workstations? Probably not. It is more likely that this is another example of the Lawyers Full Employment Act (with apologies to Mr. Beckerman and other honest attorneys) than a genuine issue of consumer redress.
What doesn't make capitalism work is a bunch of people without jobs.
I bet lawyers are thriving, though.
There's no reason settling, or even losing a lawsuit will cause the stock price to drop.
Specifically, if the suit is seen as being a drain on company resources, then resolving it could easily cause prices to rise. This is especially true if the suit's outcome is more favorable for the company than expected, such as a settlement that is less than the expected judgement if the case went to trial.
To quote LongNoi "QZTR was right and won't leave me alone because I called him a moron when I was wrong" FYS
1. A dirty little secret of all governments, the USA included, is that they _can't_ get rid of unemployment or inflation, and they're actually trying to keep both where they want them. There's this funny little hyperbolic-looking curve called the Phillips Curve, which ties inflation to unemployment. If you even tried to push one to zero, the other rises sky-high.
So the best any government can do is to keep both at a point they can live with. Exactly what that point is, that's a matter of political debate and position, but everyone tries to do that. A mean most used is the interest rate. That's what the federal reserve does in the USA, but other countries have their own similar institutions.
(The corolary being that any politician which harps on unemployment and inflation as proof that his opponents are evil, or worse yet, promises to really solve either or both, is himself a liar and has no scruples telling you lies to gain power.)
So, yes, a bunch of people without jobs _are_ what makes the economy work. (A capitalist economy included.) Because without those, you'd get a hyperinflation comparable to interwar Germany. (Just as a comparison point, not saying that that's the same cause.) And conversely, if anyone actually managed to eliminate inflation, like some idiots demand, most of you would be out of job.
2. Well, actually, the reluctance to make people change jobs was arguably one of the (several) reasons the Soviet economy colapsed. They were very reluctant to kick people out of a job, since the whole theory was that everyone should be given a job in communism. So if they made a hammer manufacturing company, and 20 years later there would be more of a need for wrenches, they'd still keep a bunch of people there making hammers, just so they don't kick them out and tell them to find another job. It's not the only factor, of course, but worth thinking about.
Or seen at another level, they wanted to eliminate both the unemployment _and_ inflation (via price controls) which had the same devastating results as when it had been attempted before. If both can't take their natural positions on that curve, something else has to give. In their case, productivity went down instead, and corruption went out of hand. Which effectively is another way to get inflation, only in a much more destructive way.
3. The whole thing about capitalism and the free market is that it's an optimization algorithm. It's really a genetic algorithm, based on semi-uninformed trial and error. The "genes" (processes, ideas, products) which are closer to optimal survive and are copied by others, and the process repeats, moving it all closer to the optimum. The genes which lost, and the companies which bet on them, die. Sometimes spectacularly, leaving a bunch of people temporarily unemployed.
That's how it's supposed to work. Bit wasteful, no doubt, and stressful for those who end up looking for a new job. Scott Adams of Dilbert fame (who, I might add, is actually trained as an economist, so he might understand these things) claimed in a blog post that it's "harnessing the power of stupidity" and that at any given moment, 80% of society's resources are pushed off a cliff by idiots. But somehow it seems to work better than anything else we've tried. Trying to prevent that optimization cycle from happening, deviates from optimum very quickly, and produces even worse results.
It _is_ what makes capitalism work.
A polar bear is a cartesian bear after a coordinate transform.
From the onset of the GeForce series, I had always held Nvidia with high regard. Their cards were frequently the defacto industry standard in terms of availability, and I was always excited when a new detonator pack was released, improving performance and features. Yes, over the years they've had their headbutting with the OS community when it came to drivers and functionality, but as of the past year, improvements were being made.
Unfortunately, this news about Exec's, if indeed true, saddens me deeply. I always looked forward to Nvidia's press releases and seeing what new tech. they could come up with. Keeping the bleeding edge battle with ATI is something that the industry needed and something that ONLY good things would come out of, for consumers.
But here we are, in another 'scandal' where the exec's 'gut' the company, and its reputation as an industry leader. Like pretty much every other industry, the graphics chipset corner has fallen prey. It is not the engineering, marketing, or position that mucks things up, but the PHB's at the top.
I was naive to think that something so large as this would ever hit one of my favorite hardware vendors. But I guess the norm for C.O.'s and Board Exec's has finally infiltrated one of the last companies I had true appreciation for.
Ultimately, this will leave me with a big hole as to who I can really trust for my graphics powerhouse. ATI, though slowly coming around, is still thoroughly dragging its feet with Open Source. Nvidia? How can I really trust them now. Truth is, I can't. And THAT, is the biggest hit a company takes, when it comes to its consumers.
And why would anyone mod you up for what is common knowledge?
With 0% unemployment, there's no one to hire when new jobs open up or current employees need replacing.
Nothing secret about it, just a little common sense.
To quote LongNoi "QZTR was right and won't leave me alone because I called him a moron when I was wrong" FYS
Is there a list of affected models buried in there somewhere?
Doesnt NVIDIA supply the graphics chips that were part of the problem for microsoft?
Today is not a good day to own Nvidia stock - or apparently many of their graphic cards.
A big lawsuit, and ATI's new 46xx series being launched, which at the $68-$79 price range competes very effectively with Nvidia's (now former) $150 price range cards. Yeah Nvidia can and has cut prices to be competitive, and bye bye profits since you are, at best, now selling those cards at cost.
Sux to be you today.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
You can trust individuals, yes, but regardless of the pernicious doctrine of corporate personhood, that's as far as you should go. Corporations are basically required by law to behave in an untrustworthy way, and even if the individual at the helm of the corporation is trustworthy there are limits to how far they can carry their intentions (however good) through.
...*successfully* suing software makers for delivering faulty crapware?
...with their Glaze3D line of video cards.
Oh, waitminute.... ATI bought out that vaporware outfit too!
Dang, now I'll never get a graphics card good enough to run DNF upon.
3 months out of warranty so it's going to cost me around $1200 to get it fixed
I have been a rabid evangelista for over 20 years, so heed me when I say that anyone who buys a pro-grade Mac laptop without extended AppleCare is a fool. Every PowerBook (and now MBP) that I've ever owned had at least one hardware failure in the 1-3 years out timeframe. This 8600 issue is par for the course.
Serious flaw eh? Tell me about it. I bought my laptop in June 2007 and it failed once in April 2008 and again just three days ago. The culprit? MY 8600M GS both times. I'm not going to pay $400 for a new motherboard...
First, do you understand what context is? I ask because your reply ignored the context of the last post.
You see, when the discussion is clearly about unemployment rates and how they effect hiring, intelligent people realize that when one says "there's no one to hire when the unemployment rate is 0%" that the discussion is about the unemployed.
Or did you think I was arguing a 0% employment makes the population vanish into thin air, thereby leaving literally no one to hire?
Second, in the context of your statement, you couldn't hire away enough people to even touch the inflation rate, much less actually cause a real change.
To quote LongNoi "QZTR was right and won't leave me alone because I called him a moron when I was wrong" FYS
en garde!
And loss of employee work time, loss of money, loss of data thru security breaches, etc. because of faulty software failing to work as claimed for the customer, are not considered material harm?
Really? I thought the very fact that gold kept being mined out of the ground, caused a steady inflation. Except it was uncontrollable and unpredictable.
Then you had stuff like the discovery of gold and silver mines by the Spanish in America, caused some uncontrollable bursts and fits of hyper-inflation in Spain. Paradoxically, that gold and silver influx actually caused Spain to go bankrupt. Twice. In a row. Because the economy had just become unpredictable and a budget was impossible to plan.
Also most countries steadily devalued their coins, or they were devalued by counterfeiting and people removing small amounts of gold from the coins. Or you had big bursts of it, like when the Romans devalued the solidus. But even without such big events, what do you think happened when, say, Trajan came with a buttload of gold and silver from Dacia, or Odoacer had the mints running full time to keep his Goths on his side?
Or read a bit about the Black Death outbreaks. Unemployment practically disappeared, as there were not enough peasants and craftsmen for the nobles to employ. Prices shot up. There was some _massive_ inflation in the 14'th and 15'th centuries. (Which also provides some early illustration for that curve at work.)
So, nope, it's not a new thing, it happened _long_ before fiat money.
_Partially_ true. Nobody believes any more that those two are the _only_ variables in that equation, yes. But when all else is equal, the relationship between the two holds.
At any rate, heck, your government (assuming you're in a western country) still applies that curve quite successfuly. Again, that's how and why we all control inflation. But, at the very least, there you go, most governments still didn't abandon it at all.
That was a hypothetical example. More realistic examples would be something like wrenches and computers. It's a bit harder to shift people between radically different jobs without having a pool of qualified unemployed people as, basically, a suspension to absorb the shocks.
Also bear in mind that the USSR wasn't quite chattel slavery, or at least not after Stalin. They had mechanisms to guide people at certain points, like assigning them a job after college. But after that, they didn't go to someone and say, "you! pack your things, we're making you a truck driver starting tomorrow!" The only way to shift someone to a new job is if they asked for a transfer and it got approved. Otherwise, you could _usually_ die of old age in the same job you got after college or high school. Even if that job was no longer needed, or you were totally incompetent at it.
Otherwise, if you needed more jobs for a factory, you really had to wait until enough graduates get churned out and assigned there. In short, their economy turned slower than a battleship.
In a sense, yes, they got rid of certain markets (like the employment market) and the replacements were non-existent or dysfunctional.
A polar bear is a cartesian bear after a coordinate transform.
You're acting like your scenario is an absolute, when it hardly even applies.
1) not all businesses have access to the financial options you speak of
2) raising prices isn't an option for many businesses because they would lose on price to competitors and be driven out of business.
Your loan scenario only applies in a tiny minority of situations.
To quote LongNoi "QZTR was right and won't leave me alone because I called him a moron when I was wrong" FYS
Well, it essentially boils down to psychology, I guess. If all people without jobs died over night, then half the people _with_ jobs would get the idea, "hey, where are you going to get a replacement if you fire me?" So now they'd get a lot more "balls" to ask for a raise.
Or another way to look at it is in terms of supply and demand. Essentially there is a supply of workers, and a demand for it, and the prices reflect that. The current wages and the inflation are the result of a certain ratio between the two. If all the people without jobs died over night, would change that ratio.
A polar bear is a cartesian bear after a coordinate transform.
Note that HP quickly stops selling replacement parts for its laptops, or supporting buying parts from other vendors. I would never buy an HP laptop, either.
I'm going to start posting baseless flamebait to /. and see if I get tagged "interesting". I bet the "M$" thing works too.
You clearly haven't been following developments at Nvidia. There is understatement, not bias.
I wish Gustav had taken out your internet permanently.
Seriously, /. was perceptibly better when you weren't around. Can you stay gone? Please?
When did nVidia know that the G84 and G86 lines were defective? Was it before they green-lighted the chips for use in the OEM notebooks, or was it after months of investigating customers' and partners' complaints about dying video hardware?
Regardless of the answer, the fact that they tried to cover it up will not look good in court.
Hope Apple puts fan controls in the Boot Camp software (not likely, but a guy can dream).
"We are Microsoft. You shall be assimilated. Competition is futile."
Don't forget that organizations, especially large ones, can be amazingly clueless about possibilities for reorganizing work (and a bureaucracy that controls a whole economy is as large as it gets). In the current example, it is quite plausible that the management might need workers in the wrench factory but fail to realize that it has qualified people in the hammer factory.
Markets have the advantage that another organization with smarter management can take advantage of such failures. In this example, start a competing wrench factory and hire the workers from the hammer factory.
Slightly OT:
I think that this advantage in overall, economy-wide efficiency is the main reason the Soviets lost the cold war. At some point, their clumsy state-directed economy could not keep up with the expenses of the arms race anymore.
C - the footgun of programming languages
We are still waiting for those... you are the last. Linux needs the best graphic stack in order to proceed, crushing others, on the desktop.
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