Facepalm: Nvidia’s extremely anticipated Blackwell sequence of AI chips has encountered a big setback. Newly found design flaws will delay shipments by at the very least three months. This delay will probably trigger appreciable disappointment amongst clients who’ve positioned billions of {dollars} in orders.
Nvidia’s extremely anticipated Blackwell sequence of AI chips is dealing with vital delays on account of design flaws found late in manufacturing. The Data cites two nameless sources concerned with Nvidia’s chip and server {hardware} manufacturing, stating that the problem might take at the very least three months to resolve.
The crux of the problem lies within the processor die connecting two Blackwell GPUs on a GB200 chip – an issue recognized by producer TSMC. In response, Nvidia is revising the design and might want to conduct new manufacturing assessments with TSMC earlier than mass manufacturing begins. As a stopgap measure, the corporate is contemplating producing a single GPU model of the Blackwell chip to expedite supply.
The delay has far-reaching implications for Large Tech gamers who’ve invested closely in Nvidia’s expertise. For example, Google has ordered over 400,000 GB200 chips in a deal exceeding $10 billion. Equally, Meta has positioned a $10 billion order, whereas Microsoft had plans to have 55,000 to 65,000 GB200 GPUs prepared for OpenAI by the primary quarter of 2025 – a timeline now in jeopardy.
Nvidia has reportedly knowledgeable Microsoft and one other cloud supplier concerning the delay affecting essentially the most superior AI chip fashions within the Blackwell sequence. Consequently, vital shipments of those chips should not anticipated till the primary quarter of 2025, doubtlessly disrupting the AI methods of those tech giants.
Regardless of these experiences, Nvidia’s official stance stays optimistic. An organization spokesperson acknowledged that “manufacturing is on monitor to ramp” later this 12 months with out straight addressing the reported delay. In the meantime, the affected firms, together with Microsoft, Google, Amazon Internet Providers, and Meta, have declined to remark.
The setback might enable Nvidia’s opponents to achieve floor within the AI chip market. Intel and AMD have struggled to impression Nvidia’s market share for the reason that outset of the AI growth. Nonetheless, the delay may allow them to reposition their merchandise as viable options for patrons needing instant options.
For example, AMD designed its open-source ROCm framework to compete straight with Nvidia’s CUDA, providing builders an alternative choice to construct AI purposes with out being locked into Nvidia’s ecosystem. Likewise, Intel is growing AI accelerator chips, together with the Gaudi line, as extra inexpensive options. In line with Intel, its AI accelerators are one-third to two-thirds the value of competing manufacturers.
As clients transfer previous the preliminary disappointment of the delay, they might query Nvidia’s capacity to keep up its dominant 80-percent market share within the face of manufacturing challenges and growing competitors. Because the AI arms race intensifies, the trade will intently watch how Nvidia navigates this hurdle and whether or not it may possibly ship on its guarantees to its high-profile clients.
