Nvidia’s next-generation AI chip, the Blackwell B200, is set to enter production at least three months later than planned. The delay is due to a design flaw discovered at an unusually late stage in the design process, according to The Information. Microsoft and at least one other cloud provider have also reportedly been notified of the delay.
The Blackwell B200 chips are Nvidia’s follow-on to the popular and hard-to-find H100 chips. The H100 chips are a major part of cloud AI infrastructure and have played a key role in making Nvidia one of the world’s most valuable companies. Nvidia said it expects production of the chip to ramp up in the second half of 2024. “Beyond that, we don’t comment on rumors,” Nvidia spokesperson John Rizzo told The Verge.
Causes and effects of Nvidia’s production delay
This design error has caused Nvidia to reconsider its manufacturing process and conduct new tests. Nvidia is reportedly undergoing new testing processes with its chip manufacturing partner Taiwan Semiconductor Manufacturing Company, and that large shipments of Blackwell chips will not begin until the first quarter of 2024. This could impact the plans of companies that have ordered the chips in large quantities, such as Microsoft, Google, and Meta. These companies are reported to have ordered chips worth “tens of billions of dollars.”
Nvidia recently announced that Blackwell-based products will be available to partners in 2024. The new chips were expected to mark the start of Nvidia’s plan to produce new AI chips every year. The delay could accelerate efforts by other tech firms, such as AMD, to develop their own AI chips and increase competition.
Nvidia has recently faced two separate antitrust investigations from the US Department of Justice due to its market dominance, further complicating the company’s efforts to maintain its position in the market. Nvidia aims to overcome these investigations and increased competition with the launch of its new AI chips.
This delay in Nvidia’s Blackwell B200 chips could have a significant impact on the AI market. The company will need to rethink its strategies to compensate for this delay and meet its commitments to its customers. Nvidia is making a concerted effort to speed up the production of chips and meet market demands.
In the upcoming period, how Nvidia will overcome these challenges and maintain its market share with the launch of Blackwell B200 chips is a matter of great curiosity. The company aims to emerge from this process stronger with its technological innovations and strong customer relationships. The steps Nvidia will take in this process can shape the future of the AI chip market and determine the dynamics of the sector.