\n
![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2024\/08\/GettyImages-2094937967-e1722988496792.jpg?w=2048\")
<\/p>\n [ad_1]
\n<\/p>\n
Nvidia<\/a> Corp. hit engineering snags in the development of two new advanced chips, slowing the release of some products designed to extend its lead in the market for artificial intelligence computing.<\/p>\n The delays affected the company\u2019s highly anticipated\u00a0Blackwell<\/a>\u00a0lineup, which Nvidia announced in March, according to people familiar with the situation. A version of the chip \u2014 known as an AI accelerator \u2014 is being reworked to better work with data center infrastructure designed for an earlier chip, the Hopper H100.\u00a0<\/p>\n That\u2019s a relatively small segment of the market, though, said the people, who asked not to be identified because the matter is private. Separately, a product that combines a processor with a graphics chip won\u2019t be available in large numbers as quickly as hoped because of problems with supporting technology, they said.<\/p>\n The snags \u2014 first reported by the Information website \u2014 reflect the challenges of speeding up the pace of innovation at Nvidia. Chief Executive Officer Jensen Huang is introducing new chip designs and technology more rapidly, aiming to maintain an edge in AI computing. The company dominates the market for AI accelerators \u2014 an advantage that has sent its sales and market valuation soaring over the past two years.\u00a0<\/p>\n Nvidia declined to comment on \u201crumors\u201d about the recent engineering problems. The company has said it has begun sending out samples of Blackwell to customers broadly, and demand for its Hopper generation remains strong.<\/p>\n Blackwell \u201cproduction is on track to ramp in the second half,\u201d the Santa Clara, California-based company said in a statement.<\/p>\n Reports about the delays contributed to a 6.4% stock decline for Nvidia on Monday, though a broader tech rout also weighed on the shares. Rival Advanced Micro Devices<\/a> Inc., meanwhile, gained 1.8% \u2014 a sign investors hope it may be able to capitalize on the problems.\u00a0<\/p>\n Nvidia supplies its chips to companies like Microsoft<\/a> Corp. and Alphabet Inc.\u2019s Google<\/a> that are spending billions on building data centers, anticipating a surge in demand for AI services.<\/p>\n While the delays may affect the flow of the components, which are manufactured by Taiwan Semiconductor Manufacturing<\/a> Co., analysts have mostly taken the concerns in stride. Given the acceleration of innovation, \u201cbumps will continue to happen,\u201d TD Cowen<\/a> analyst Matt Ramsay said in a research note.<\/p>\n Weekslong delays, if they materialize, probably won\u2019t have an impact on Nvidia\u2019s rapid revenue gains or long-term growth, he said. Much will depend, however, on how quickly Nvidia fixes the issues and gets chips to major clients.<\/p>\n In May, Nvidia\u2019s Huang said that Blackwell had reached full production and would be available to cloud-computing providers later this year. He predicted that demand would continue to exceed supply for both the new lineup and its predecessor.<\/p>\n \u201cWe will see a lot of Blackwell revenue this year,\u201d Huang said on a post-earnings conference call with analysts. The company is scheduled to give its next quarterly report Aug. 28.<\/p>\n<\/div>\n CEO Daily provides key context for the news leaders need to know from across the world of business. Every weekday morning, more than 125,000 readers trust CEO Daily for insights about\u2013and from inside\u2013the C-suite. Subscribe Now<\/a>.<\/div>\n\nRecommended Newsletter:<\/strong><\/p>\n