NVIDIA's Blackwell AI Chip Issues

Investing.com reports that NVIDIA's (NASDAQ:NVDA) new Blackwell AI chip is experiencing overheating problems when used in customized server racks. The company is actively working with suppliers to redesign the racks to resolve the overheating issue, which has raised concerns among anxious customers regarding possible delays.

Shares of NVIDIA fell 2.9% during premarket trading on Monday.

The AI chip giant had already postponed the Blackwell launch by a quarter due to earlier design flaws, which have since been addressed. The new server racks, which house 72 Blackwell chips, offer a highly powerful AI system. Major clients, including Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META), and Elon Musk’s xAI, are eagerly anticipating the new server racks.

NVIDIA typically modifies server designs prior to launch, but changes to the Blackwell racks are reportedly being made at a late stage. Nonetheless, the company may still manage to deliver the racks on schedule and has not yet informed customers of any delays.

An NVIDIA spokesperson did not provide comments to The Information regarding the finalization of the Blackwell rack designs.

All eyes are on NVIDIA as it approaches its earnings announcement on Wednesday, November 20th, with the stock having increased by 187% year-to-date.