Photo credit: www.investing.com
Nvidia’s Blackwell Chip Racks Face Order Delays Amid Overheating Concerns
(Reuters) – Nvidia, the leading provider of AI chips, is reportedly facing order delays from key customers concerning its latest ‘Blackwell’ racks, primarily due to overheating challenges. This development has been highlighted in a recent report by the Information.
The company’s stock experienced a decline of over 4% in early trading following the news.
Compounding the situation, the U.S. government announced new restrictions on AI chip and technology exports, which could further impact Nvidia’s sales trajectory.
Reportedly, the initial shipments of the Blackwell chip racks have encountered issues related to overheating and connectivity glitches among the chips. These racks, essential in data centers, are designed to house chips, cables, and other critical equipment.
Major technology firms, including Microsoft, Amazon’s cloud services, Alphabet’s Google, and Meta Platforms, have slashed some of their orders for Nvidia’s Blackwell GB200 racks due to these issues. Each of these hyperscalers had placed substantial orders exceeding $10 billion for the Blackwell racks, according to the report.
While some clients are awaiting a more refined version of the racks, others are considering reverting to Nvidia’s older AI chip models. For instance, Microsoft had initially anticipated deploying GB200 racks with 50,000 Blackwell chips in one of its facilities in Phoenix. Due to the emerging challenges, OpenAI, a significant partner, has requested that Microsoft provide an older generation of Nvidia’s ‘Hopper’ chips instead.
The implications of these order reductions on Nvidia’s overall sales remain uncertain, as there could potentially be other buyers interested in the GB200 server racks, despite their reported issues.
Despite the current setbacks, Nvidia is still projected to surpass its previous revenue targets for Blackwell chips in the fourth fiscal quarter. CEO Jensen Huang expressed optimism in November about the company’s financial performance. Huang also refuted earlier claims regarding a liquid-cooled server containing 72 of the new Blackwell chips experiencing overheating issues during initial tests.
Source
www.investing.com