Nvidia Corp’s upcoming AI chips will be delayed due to design flaws, The Information reports, citing two unidentified people involved in the production of the chip and its server hardware. Nvidia has told Microsoft and at least one other cloud provider that production of its “Blackwell” B200 AI chips will take at least three months longer than expected, according to The Information. The delay is the result of a design flaw that was discovered “unusually late in the production process,” according to two unnamed sources, including a Microsoft employee, cited by the outlet.
The B200 chips are the successors to the wildly popular and hard-to-find H100 chips that power much of the AI cloud landscape (and helped make Nvidia one of the most valuable companies in the world). Nvidia is reportedly working on a new round of testing with chipmaker Taiwan Semiconductor Manufacturing Company, and won’t ship large quantities of Blackwell chips until the first quarter. The Information writes that Microsoft, Google, and Meta have ordered chips worth “tens of billions of dollars.” The report comes just months after Nvidia said that “Blackwell-based products will be available from partners” starting in 2024. The new chips are expected to kick off a new annual cadence of AI chips from the company as several other tech companies, like AMD, work to create their own AI chip competitors.
A delay could hurt Nvidia’s earnings later this year, as well as NVDA stock. It could also hit TSMC, as well as rival Advanced Micro Devices (AMD), which would follow Nvidia with new Blackwell chips. Major customers such as Microsoft, Google parent Alphabet (GOOGL) and Meta Platforms (META) have ordered tens of billions of dollars in next-generation chips for their AI ambitions.