Nvidia Faces Production Delays for Blackwell Chips, Influencing Amazon’s Plans

Nvidia Corp’s NVDA Blackwell chips won’t be ready before early 2025, impacting major clients like Amazon.com Inc’s AMZN cloud division.

Amazon’s Setback in AI Development

The delay in production at Nvidia means that Amazon Web Services will have to postpone the acquisition of Blackwell chips for its data centers. On Bloomberg Television, Amazon Web Services chief Matt Garman confirmed this setback related to Nvidia’s manufacturing process.

Nvidia’s Strategy in the Face of Demand

During this latest development, Nvidia chief Jensen Huang reassured investors that the demand for Blackwell GPUs remains strong. KeyBanc analyst John Vinh projected that revenues from Blackwell could exceed $7 billion in the fourth quarter. Meanwhile, Beth Kindig of I/O Fund anticipates that these chips could propel Nvidia’s valuation to $10 trillion by 2025. However, JPMorgan analyst Harlan Sur downplayed the significance of these production delays on overall AI demand.

New Partnerships and Competitor Strategies

Earlier this week, Amazon signed a five-year partnership with AI and data startup Databricks. This agreement aims to provide businesses with affordable AI development tools by leveraging Amazon’s Trainium AI chips, a budget-friendly alternative to Nvidia’s popular GPUs. With this step, Databricks hopes to bring competitive pricing to the market.

Market Reactions to Nvidia’s Performance

Nvidia stock has surged over 227% in the past year, buoyed by strong quarterly performance from its main supplier, Taiwan Semiconductor Manufacturing Co’s TSM. The chipmakers expect a dramatic increase in demand for high-performance computing chips over the next year, according to Nikkei Asia.

Investment Opportunities for Nvidia

Investors seeking exposure to Nvidia may consider the SPDR Select Sector Fund – Technology XLK and the iShares S&P 500 Growth ETF IVW.

Current Stock Price

Price Action: As of the latest update, NVDA stock has risen by 0.84% to $138.09.

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