Nvidia, a leading tech company renowned for its AI chips, has reportedly encountered a significant setback in the production of its highly-anticipated Blackwell B200 AI chips. According to sources cited by The Information, including a Microsoft employee, Nvidia has informed Microsoft and other cloud providers that the production of the B200 chips will be delayed by at least three months. This delay is attributed to a design flaw that was discovered “unusually late in the production process.”

The B200 chips were set to be the successors to the immensely popular and sought-after H100 chips, which have been instrumental in powering various AI applications across the cloud landscape. The delay in the production of the B200 chips is likely to have a significant impact on the AI market, as companies that were anticipating the arrival of these chips may now have to reconsider their AI strategies and timelines.

Nvidia has stated that it expects production of the B200 chips to ramp up in the second half of the year. However, the company has not provided any specific details about the expected timeline for the availability of the chips in the market. Nvidia spokesperson John Rizzo responded to the reports by stating, “Beyond that, we don’t comment on rumors.”

In response to the design flaw, Nvidia is said to be working closely with its chip producer, Taiwan Semiconductor Manufacturing Company, to address the issue. The company is reportedly conducting a new set of test runs to ensure that the production of the chips meets the required standards. It is expected that Nvidia will not ship large numbers of the Blackwell chips until the first quarter of the following year.

Despite the delay in production, leading tech companies such as Microsoft, Google, and Meta have already placed significant orders for the B200 chips, amounting to “tens of billions of dollars.” These companies were banking on the arrival of the new chips to enhance their AI capabilities and stay competitive in the rapidly evolving tech landscape. The delay in production may lead these companies to explore alternative options or technologies to fulfill their AI requirements.

The delay in the production of Nvidia’s Blackwell B200 AI chips due to an unexpected design flaw is a significant setback for the company and its partners in the tech industry. The impact of this delay on the AI market remains to be seen, but it is clear that Nvidia will need to work diligently to address the issue and deliver the chips to meet the growing demand for AI technologies.

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