Nvidia’s AI Chip Delay: What It Means for Tech Giants and the Market

Nvidia (NVDA) is reportedly postponing the release of its next-generation AI chips by at least three months, with mass shipments potentially not starting until early next year. 

According to The Information, which cited a Microsoft employee and another source, the delay is due to a design flaw discovered late in the production process affecting the Blackwell B200 AI chips. These chips were expected to replace the highly successful H100 models, significantly boosting Nvidia’s sales, profits, and stock.

This setback could affect customers such as Meta Platforms (META.O), Alphabet’s (GOOGL.O), and Microsoft (MSFT.O). The companies have collectively ordered tens of billions of dollars worth of chips.

Nvidia unveiled its Blackwell chip series earlier this year. It succeeds its earlier flagship AI chip, the Grace Hopper Superchip, designed to speed up generative AI applications.

“As we’ve stated before, Hopper demand is solid, broad Blackwell sampling has started, and production is on track to ramp in the second half,” an Nvidia spokesperson said in an emailed statement in response to the report.

Nvidia Stock

NVDA stock was marked significantly lower early Monday. Last week, shares fell 5.1% to 107.27, dropping well below the 50-day and 10-week lines.

Chip and AI stocks fell alongside the broader market last week. Late last week, There were also allegations that the Justice Department is investigating Nvidia for its AI dominance.

AMD stock plummeted 5.35% last week, reaching a 2024 low. Shares soared briefly after AMD reported solid results but then fell.

TSM stock fell 7.5% last week and is now trading well below its 50-day and 10-week moving averages. Taiwan Semiconductor will announce its July sales on Friday.

Microsoft fell 3.95% last week on weaker-than-expected Azure cloud-computing growth, although shares found support near the 200-day line.

Meta stock rose 4.8% to 488.14 for the week but closed below its 50-day line after initially rising Thursday on earnings. Google fell 0.2% last week after plunging the previous week’s earnings. Microsoft, Meta, and Google all indicate that AI-led capital spending will continue to be high, with Nvidia chips accounting for a significant portion of it.