Nvidia Inc. is facing technical problems in the development of two new advanced chips, delaying the release of some products designed to extend its lead in the artificial intelligence computing market.
The delay affected Nvidia’s long-awaited Blackwell product line, which it unveiled in March, according to people familiar with the matter. A version of the chip, known as the AI Accelerator, has been tweaked to work better with data center infrastructure designed for the company’s previous chip, the Hopper H100.
But that’s a relatively small slice of the market, said the people, who asked not to be identified because the matter is private, and the processor-graphics chip combination probably won’t become available in large quantities as quickly as hoped because of problems with supporting technology, the people said.
The issues, first reported by The Information website, reflect a challenge to speed up innovation at Nvidia, which Chief Executive Officer Jensen Huang has said is introducing new chip designs and technologies more quickly to maintain its dominance in AI computing, a dominance that has seen its revenue and market valuation soar over the past two years.
Nvidia declined to comment on “rumors” about recent technical issues. The company said it has begun sending out Blackwell samples broadly to customers and that demand for the Hopper generation remains strong.
“Production is expected to ramp up in the second half of the year,” Santa Clara, California-based Blackwell said in a statement.
News of the delays sent Nvidia shares down 6.4% on Monday, while a broader tech sell-off also weighed on the stock. Meanwhile, rival Advanced Micro Devices rose 1.8%, a sign that investors are hopeful the company can take advantage of the problems.
Nvidia supplies its chips to companies including Microsoft Corp. and Alphabet Inc.’s Google, which are spending billions of dollars to build data centers in anticipation of a surge in demand for AI services.
The delays could affect supplies of parts made by Taiwan Semiconductor Manufacturing Co., but analysts have largely played down the concerns. “We expect issues to continue to arise” given accelerating innovation, TD Cowen analyst Matt Ramsey wrote in a research note.
He said delays of several weeks, even if they do materialize, would not impact Nvidia’s rapid revenue growth or long-term growth, but a lot would depend on how quickly the company can resolve the issues and get chips to key customers.
Nvidia’s Huang said in May that Blackwell was reaching full production and would be available to cloud-computing providers later this year. He predicted that demand for both the new product and its predecessor would continue to outstrip supply.
“Blackwell’s revenue is expected to grow significantly this year,” Hwang said on a conference call with analysts after the company’s earnings release. The company is due to release its next quarterly report on Aug. 28.
