Reports of Blackwell chip design flaw sends Nvidia shares tumbling

Nvidia’s shares suffered a sharp decline in pre-trading on Monday as the markets reacted to reports its latest chips in the Blackwell series will be delayed due to design flaws. 

The setback for the semiconductor market leader comes as other big tech losses contributed to Nasdaq’s worst day in almost two years.

Nvidia’s tumble of around 8% – up from 13% as the market opened – extends the stock’s one-month fall to approximately 23%, exacerbated by the news on its latest series. 

The world’s third most valuable company by market cap unveiled its Blackwell range of processors earlier this year, platforming their capability to carry out AI functions at more than twice the speed of the current Hopper set. The new range is also said to be more efficient and able to provide more bespoke options. 

According to The Information, Microsoft and another client have been informed the Blackwell B20 chips will be delayed by at least three months. 

Orders worth tens of billions waiting in the wings

The issue is said to be “a key design flaw identified unusually late in the production process,” with the B200 coming as a successor to the popular, desired H100 chips. 

That commodity was an important driver in Nvidia’s rise to the top but now the Santa Clara-based firm has to navigate some relatively choppy waters to reverse the decline of recent weeks. 

Nvidia could have further concerns after progressive groups and lawmakers, backed by Sen. Elizabeth Warren (D-Mass.), penned a letter to the antitrust chief Jonathan Kanter to open an investigation into the business activity of the chip maker. 

The company wants to ramp up production in the second half of the year but before the Blackwell set can be signed off, it is said to be engaged in test runs with TSMC. This means the B200 is unlikely to be shipped until the first quarter with orders worth “tens of billions of dollars” sitting on the books, from the likes of Google, Microsoft, and Meta.

Image credit: Via Ideogram

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