Nvidia’s new AI chip delayed due to design flaws, says report

Chip maker Nvidia Corporation’s upcoming artificial intelligence (AI) chips will be delayed by at least three months due to design flaws, as per a report in The Information, citing two people who help produce the chip and its server hardware.

The AI chips may be delayed by three or more months, the sources said, Bloomberg reported. The delay will likely impact Nvidia’s customers, which includes big names such as Meta Platforms Inc., Google LLC and Microsoft Corporation.

Nvidia this week informed Microsoft about a delay affecting the most advanced AI chip models in the Blackwell series, according to an unidentified Microsoft employee and another person.

The delays mean big shipments aren’t expected until the first quarter of 2025, The Information added.

A Nvidia spokesperson did not comment on the delay, Bloomberg said, but they did tell The Information that “production is on track to ramp” later this year.

Microsoft, Google, Amazon Web Services and Meta representatives also refused to comment on the development, while a TSMC spokesperson did not respond to a request for comment.

Nvidia adds record $329 billion in market value

On August 1, Nvidia share prices surged nearly 13 per cent, adding around $330 billion in stock market value to the chip maker, in a record one-day gain for any company on Wall Street. Nvidia stock price jumped 12.81 per cent to $117.02 per share, making it worth $2.88 trillion — and the third most valuable company on Wall Street, behind Apple and Microsoft.

This market cap surge shattered Wall Street’s previous record, which was also set by Nvidia on February 22 when it gained $277 billion, Reuters reported. Nvidia’s highest ever closing stock market value was $3.34 trillion on June 18, according to LSEG.

The rally in Nvidia shares was due to expectations of high demand for its processors after Microsoft late on Tuesday reported a massive increase in artificial intelligence expenditures.

Intel, AMD try to catch Nvidia in AI chip race

Meanwhile, the chip wars are heating up. At the Computex 2024 tech event in June, Intel and AMD introduced new chip technology to try to catch up with Nvidia.

AMD unveiled the Ryzen AI 300 Series, which promises to deliver new AI experiences on Windows CoPilot+ PCs. According to the company, the Ryzen AI 300 processors come with the world’s most powerful neural processing unit for next-gen AI PCs and are built on the new “Zen 5” architecture.

Intel, launched its Xeon 6 processors, while also revealing prices for its Gaudi 3 and Gaudi 2 AI accelerator kits. According to Intel, the combination of Xeon processors with Gaudi AI accelerators in a system would offer a solution for making AI faster, cheaper and more accessible.

(With inputs from Bloomberg and Reuters)