Nvidia’s next-generation AI chip rollout slowed by engineering snags
NVIDIA hit engineering snags in the development of two new advanced chips, slowing the release of some products designed to extend its lead in the market for artificial intelligence (AI) computing.
The delays affected the company’s highly anticipated Blackwell lineup, which Nvidia announced in March, according to sources familiar with the situation. A version of the chip – known as an AI accelerator – is being reworked to better work with data centre infrastructure designed for an earlier chip, the Hopper H100.
That’s a relatively small segment of the market, though, said the sources, who asked not to be identified because the matter is private. Separately, a product that combines a processor with a graphics chip will not be available in large numbers as quickly as hoped because of problems with supporting technology, they said.
The snags – first reported by the Information website – reflect the challenges of speeding up the pace of innovation at Nvidia. Chief executive officer Jensen Huang is introducing new chip designs and technology more rapidly, aiming to maintain an edge in AI computing. The company dominates the market for AI accelerators – an advantage that has sent its sales and market valuation soaring over the past two years.
Nvidia declined to comment on “rumours” about the recent engineering problems. The company has said it has begun sending out samples of Blackwell to customers broadly, and demand for its Hopper generation remains strong.
Blackwell “production is on track to ramp in the second half”, the Santa Clara, California-based company said.
Reports about the delays contributed to a 6.4 per cent stock decline for Nvidia on Monday (Aug 5), though a broader tech rout also weighed on the shares. Rival Advanced Micro Devices, meanwhile, gained 1.8 per cent – a sign investors hope it may be able to capitalise on the problems.
Nvidia supplies its chips to companies such as Microsoft and Alphabet’s Google that are spending billions on building data centres, anticipating a surge in demand for AI services.
While the delays may affect the flow of the components, which are manufactured by Taiwan Semiconductor Manufacturing Company, analysts have mostly taken the concerns in stride. Given the acceleration of innovation, “bumps will continue to happen”, TD Cowen analyst Matt Ramsay said.
Weekslong delays, if they materialise, probably will not have an impact on Nvidia’s rapid revenue gains or long-term growth, he said. Much will depend, however, on how quickly Nvidia fixes the issues and gets chips to major clients.
In May, Nvidia’s Huang said that Blackwell had reached full production and would be available to cloud-computing providers later this year. He predicted that demand would continue to exceed supply for both the new lineup and its predecessor.
“We will see a lot of Blackwell revenue this year,” Huang said on a post-earnings conference call with analysts. The company is scheduled to give its next quarterly report Aug 28. BLOOMBERG
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
