Nvidia: Delays in New Chips Lead to Short-term Stock Losses

The chip manufacturer Nvidia has encountered unexpected technical hurdles in the development of two advanced chips, delaying the introduction of new products in the field of artificial intelligence (AI). This particularly affects the highly anticipated Blackwell series, which was already announced in March. A variant of the chip, known as the AI accelerator, is being revised to better align with the data center infrastructure intended for its predecessor, the Hopper H100 chip. The issue affects only a relatively small market share, as confirmed by individuals familiar with the situation. Another product, which combines a processor and graphics chip, will not be available in large quantities as planned due to technical difficulties. The technical challenges reflect the difficulties associated with Nvidia's accelerated pace of innovation. CEO Jensen Huang is rapidly bringing new chip designs and technologies to market to secure the leading position in AI computing. Despite the current difficulties, the demand for the Hopper generation remains strong. Nvidia declined to comment on the "rumors" about recent technical problems. However, the company has begun sending new Blackwell samples to customers and confirmed that production will ramp up as planned in the second half of the year. Reports of the delays led to a temporary 6.4% drop in Nvidia's share price on Monday. In contrast, competitor Advanced Micro Devices saw a 1.8% increase in its stock as investors hope AMD could benefit from Nvidia's problems. The delays could impact the delivery times of components manufactured by Taiwan Semiconductor Manufacturing. However, analysts are taking a calm view of the issues. According to TD Cowen analyst Matt Ramsay, innovations are often accompanied by minor setbacks. If the delays take weeks, it is not expected to significantly impact Nvidia's rapid revenue gains or long-term growth. The key factor will be how quickly Nvidia can resolve the issues and deliver the chips to major customers. In May, Nvidia CEO Huang announced that Blackwell production was fully underway and that the chips would be made available to cloud computing providers later in the year. He expects demand for both the new series and its predecessor to exceed supply. Nvidia's next quarterly report is scheduled for August 28.