Nvidia's New Blackwell AI Chip Servers Reportedly Overheat

(RTTNews) - Nvidia Corp.'s new Blackwell AI chips are facing overheating issues that could delay new data centres, The Information reported citing customers, suppliers and employees working on the issue.

In pre-market activity on the Nasdaq, the shares were losing around 2.5 percent to trade at $138.47.

The news comes as the world's most valuable company by market capitalization is set to release its third-quarter earnings report on Wednesday.

The AI chipmaker had unveiled its next-generation AI superchip Blackwell graphics processing unit or GPU in March, amid the significant growth in demand for AI chips worldwide. The new chip is said to do some tasks 30 times faster than its predecessor.

The initial shipments of the Blackwell AI chips were originally set for second quarter of 2024, but were delayed reportedly due to the technical issues.

As per the report by the technology-focused publication, the company asked suppliers many times for change in design of the server racks for its new Blackwell GPU, with a view to fixing the overheating problem. The changes to the Blackwell racks came late in the production process.

At the launch time, Nvidia had noted that Blackwell had already been endorsed by Alphabet and Google, Amazon, Dell, Google DeepMind, Meta, Microsoft, OpenAI, Oracle, and Tesla and xAI.

As per the firm, Blackwell was being adopted by every major global cloud services provider, pioneering AI companies, system and server vendors, regional cloud service providers and telcos all around the world.

Further, in June, the company had announced its plan to release Blackwell Ultra, a high-powered version of its Blackwell chip, in 2025, and a new AI chip platform, Rubin, in 2026.

Based on the strength of surging demand for AI chips and the launch of new AI products, Nvidia in mid June had become the world's most valuable company, overtaking tech majors Microsoft Corp. and Apple Inc.

Following reports in September that the company received subpoenas from the U.S. Department of Justice as part of an antitrust probe, its value fell behind the two tech giants.

Nvidia's market cap currently stands at $3.483 trillion, compared to Microsoft's $3.085 trillion and Apple Inc.'s $3.401 trillion.

In early November, NVIDIA replaced Intel Corp. in the Dow Jones Industrial Average.