Nvidia The company has encountered technical glitches in the development of two new advanced chips, slowing the release of several products designed to extend its lead in the artificial intelligence computing market.
The delay has affected the company’s expectations. Blackwell lineup, which Nvidia announced in March, according to people familiar with the situation. One version of the chip — called the AI accelerator — is being reworked to work better with data center infrastructure designed for an earlier chip, the Hopper H100.
However, that is a relatively small segment of the market, said the people, who asked not to be named because the matter is private. A product that combines a processor with a graphics chip alone will not be available in large quantities as quickly as expected because of issues with supporting technology, they said.
The setbacks—first reported by the Information—reflect the challenges of accelerating the pace of innovation at Nvidia. CEO Jensen Huang is introducing new chip designs and technologies at a faster pace, aiming to maintain an edge in AI computing. The company dominates the AI accelerator market—an advantage that has sent its sales and market valuation soaring over the past two years.
Nvidia declined to comment on “rumors” about recent technical issues. The company said it has begun widely sampling Blackwell to customers and that demand for the Hopper generation remains strong.
The Santa Clara, California-based company said in a statement that “Blackwell production is on track to ramp up strongly in the second half of the year.”
Reports of the delay contributed to a 6.4% drop in Nvidia shares on Monday, although a general decline in tech also weighed on the stock. Advanced Micro Devices Meanwhile, Inc. rose 1.8% — a sign that investors are hopeful the company can capitalize on these issues.
Nvidia supplies its chips to companies like Microsoft Corp. and Alphabet Inc. Google are spending billions of dollars building data centers, anticipating a surge in demand for AI services.
While delays may affect the flow of components produced by Taiwan Semiconductor Manufacturing Co., analysts have largely played down concerns. As innovation accelerates, “bumps will continue to occur,” TD Cowen analyst Matt Ramsay said in a research note.
The weeks-long delay, if any, is unlikely to impact Nvidia’s rapidly growing revenue or long-term growth, he said, but much will depend on how quickly Nvidia can fix the problem and get chips to major customers.
In May, Nvidia’s Huang said Blackwell had reached full production and would be available to cloud providers by the end of the year. He predicted that demand would continue to outpace supply for both the new product line and its predecessor.
“We’re going to see a lot of revenue from Blackwell this year,” Huang said on a post-earnings conference call with analysts. The company is scheduled to report its next quarterly results on Aug. 28.
CEO Daily provides key context for the news leaders need to know from across the business world. Every weekday morning, more than 125,000 readers trust CEO Daily for insights from—and inside—the C-suite. Follow now.
