Blackwell is key to Nvidia’s next growth phase. The new AI chip has reportedly hit an overheating snag.

Nvidia’s Blackwell chip promises faster compute for AI than predecessors. 

Nvidia has asked its suppliers to rethink the design of server racks that hold its new Blackwell chips in recent months because of an overheating issue, The Information reported.

According to the report, the racks’ reconfigurations came late in Blackwell’s production process, sparking fears it could result in delivery delays.

Blackwell is Nvidia’s new flagship graphics processing unit architecture, coming in variations known as the B100, B200 and GB200.

The AI superchip is highly sought after because it’s at least twice as fast as its predecessor, Hopper. Companies require increasingly powerful computer servers for data centers to train and run their AI models.

The chips are also considered a key growth driver for Nvidia, with one analyst previously likening Blackwell to an iPhone moment. Last month, Nvidia CEO Jensen Huang told CNBC that “demand for Blackwell is insane” and separately said that Blackwell is sold out for the next 12 months.

Customers include Amazon Web Services, Meta, Microsoft, and SoftBank.

Nvidia’s share price has soared by 195% since the start of the year, propelling it above Apple earlier this month to become the world’s most valuable company.

While some Wall Street investors have become concerned that Nvidia is overvalued, Beth Kindig, the lead tech analyst at I/O Fund, said in August that the release of Blackwell would mean “fireworks” for Nvidia’s share price.

Nvidia has already delayed shipment of the next-generation AI chips by a quarter after The Information reported in August that it had design flaws. That pushed shipments back by two to three months to December.

Huang said last month that it had fixed the design flaw in the GPUs, thanks to help from TSMC, Reuters reported at the time.

SoftBank is the first customer to use Nvidia’s Blackwell chips, the companies said at Nvidia’s AI summit in Japan last week. They are gearing up to build what they said will be Japan’s most powerful supercomputer early next year.

All eyes are on Nvidia this week as it is set to report its third-quarter earnings on Wednesday. The chip giant’s shares slipped by 3.3% in premarket trading on Monday.

A Nvidia spokesperson said in a statement shared with B-17, “Nvidia GB200 systems are the most advanced computers ever created. Integrating them into a diverse range of data center environments requires co-engineering with our customers.

“While our customers race to be first to market, Nvidia is working with leading CSPs as an integral part of our engineering team and process. The engineering iterations are normal and expected.”