November 18, 2024

Nvidia Stock Drops on Report of Snag With Blackwell Chip Servers

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Nvidia shares fell as reports, citing The Information, said that its next-generation artificial intelligence (AI) Blackwell chips have faced problems with accompanying servers that overheat.
According to a Reuters report digesting The Information’s coverage, Nvidia’s Blackwell graphics processing units overheat when connected in server racks designed to hold up to 72 chips.
A spokesperson for the AI chipmaker, which will release its highly anticipated earnings report on Wednesday, says the company “engineering iterations” are “normal.”

Nvidia (NVDA) shares fell Monday as reports, citing The Information, said that its next-generation artificial intelligence (AI) Blackwell chips have faced problems with accompanying servers that overheat.

According to a Reuters report digesting The Information’s coverage, Nvidia’s Blackwell graphics processing units overheat when connected in server racks designed to hold up to 72 chips.

The chipmaker, which will release its highly anticipated earnings report on Wednesday, has asked its suppliers to change the design of the racks several times to resolve overheating problems, Reuters said. Reuters indicated that some customers are worried they won’t have enough time to get new data centers up and running.

Nvidia stock was down as much as 1.8% Monday morning and has almost tripled this year.

Nvidia Says Engineering Changes are ‘Normal’

“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,” an Nvidia spokesperson said in a statement to Investopedia.

“While our customers race to be first to market, NVIDIA is working with leading CSPs (cloud service providers) as an integral part of our engineering team and process. The engineering iterations are normal and expected,” the spokesperson added.

Nvidia Chief Executive Officer (CEO) Jensen Huang has called the Blackwell chip “a complete game changer for the industry.” Nvidia has said it expects to ship several billion dollars worth of Blackwell revenue during the January quarter as production ramps up.

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