Nvidia, the well-known manufacturer of graphics processing units (GPUs), has recently faced some challenges with its Blackwell AI chips. According to reports from The Information, the company has been requesting design changes to its custom-designed server racks due to overheating issues with the Blackwell AI chips when connected. This has raised concerns among Nvidia’s customers, who fear potential delays in receiving the server racks.
The server racks are crucial for training larger AI models more efficiently, as they combine 72 of the Blackwell AI chips. Nvidia’s customers have been eagerly anticipating the release of these racks, hoping to harness the power of the AI chips to accelerate their AI training processes. However, the need for design changes, occurring later in the production process than usual, has cast doubt on the scheduled shipment date.
Despite the challenges, Nvidia remains optimistic about meeting its shipping deadline, which is set for the end of the first half of next year. Dell’s CEO, Michael Dell, shared on social media that Nvidia’s GB200 NVL72 server racks are already shipping and that Dell has delivered them to CoreWeave.
“NVIDIA GB200 systems are the most advanced computers ever created. Integrating them into a diverse range of data center environments requires co-engineering with our customers,” said an Nvidia spokesperson. “While our customers race to be first to market, NVIDIA is working with leading CSPs as an integral part of our engineering team and process. The engineering iterations are normal and expected.”
Nvidia’s production and shipping delays were initially caused by a design flaw, according to the company’s CEO, Jensen Huang. In October, he admitted that the issue arose from seven new chip designs that needed to be developed and put into production simultaneously. The flaw resulted in lower yields, impacting the production and shipping timeline. Huang took accountability for the setback, stating, “It was 100% Nvidia’s fault.”
Despite these challenges, Nvidia’s earnings for the fiscal third quarter are expected to remain strong. Analysts estimate revenues of $33 billion for the quarter, with a net income of $17.4 billion and earnings per share of $0.75.
Although the news of design changes and potential delays may have caused a slight dip in Nvidia’s stock during Monday morning trading, the overall performance of the company has been impressive, with shares up approximately 187% so far this year.
Nvidia’s Blackwell AI chips have garnered significant attention in the tech world. As the company continues to address the overheating issues and work collaboratively with its customers to fine-tune the server rack design, it remains to be seen when the highly anticipated product will finally be available at scale.
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