Nvidia Corporation's (NASDAQ: NVDA) new Blackwell AI chips are reportedly grappling with overheating issues.
What Happened: Nvidia's Blackwell AI chips are experiencing overheating problems when connected to server racks designed to hold up to 72 chips, reported The Information, citing Nvidia employees working on the problem and customers and suppliers familiar with the situation.
The chipmaker has reportedly requested its suppliers to modify the rack design multiple times to address the overheating issue.
A Nvidia spokesperson told Reuters, "Nvidia is working with leading cloud service providers as an integral part of our engineering team and process. The engineering iterations are normal and expected."
Nvidia did not immediately respond to Benzinga's request for comments.
The Blackwell chips, unveiled by Nvidia in March, were initially slated to ship in the second quarter.
However, they faced delays, potentially affecting customers such as Meta Platforms Inc. (NASDAQ: META), Microsoft Corporation (NASDAQ: MSFT), Alphabet Inc.'s (NASDAQ: GOOG) (NASDAQ: GOOGL) Google and Elon Musk's xAI.
Why It Matters: The Blackwell chip combines two silicon squares into a single component. It is touted to be 30 times faster at tasks like responding to chatbot queries than the company's previous offering.
The demand for the Blackwell GPU platform was described as "insane" by Nvidia CEO Jensen Huang last month.
Nvidia's Blackwell chip revenue was projected to hit $6 billion in the next quarter, according to a Morgan Stanley analyst. This projection was made despite Nvidia being fully supply-constrained on new products.
Earlier this month, Nvidia surpassed Apple (NASDAQ: AAPL) to become the world's most valuable company, largely due to its dominance in the artificial intelligence chip market. The AI giant's current market capitalization stands at $3.482 trillion.
Price Action: Nvidia shares closed Friday's trading session with a 3.26% decline, settling at $141.98. In after-hours trading, the stock saw a slight uptick, reaching $142.70 at the time of writing, according to data from Benzinga Pro.