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Awaiting the Upgrade: Amazon’s Big Bet on Nvidia’s Blackwell Chip

Daniel Kim Views  

AFP-Yonhap News

According to the Financial Times (FT) on the 21st (local time), Amazon has reportedly postponed its existing orders to receive NVIDIA’s latest super chips. The decision was made because the performance of Blackwell is twice as high as the previous model, and the launch date will not be significantly delayed. The FT commented that such changes in customer orders could hit NVIDIA’s performance.

According to the report, Amazon Web Services (AWS) has completely switched from its plan to use NVIDIA’s Grace Hopper (GH200) super chip, launched in August last year, to the next-generation model, Grace Blackwell (GB200). The company stated, “Considering the narrow release gap between Hopper and Blackwell, this measure is reasonable.” NVIDIA announced the next-generation processor Blackwell back in March, stating, “It will be twice as powerful for large-scale language model training such as ChatGPT.”

According to the FT, devices such as the H100 graphics processing unit (GPU) based on the Hopper processor began to be produced in earnest from September 2022. The GH200 is a super chip with multiple H100 GPUs and high-speed memory. The GB200 following this super chip is the first product using the Blackwell processor. The GB200, which includes two B100 chips, is expected to be priced at $70,000 and released at the end of this year.

While the increasing pre-sales demand for high-priced super chips is a positive point, the delay in purchases by big-hand customers like Amazon is a negative factor. Last year, demand for NVIDIA’s H100 chips significantly outpaced supply amid a surge in AI infrastructure investment and long waiting lists. If customers move to another queue to receive a new chip as the supply of H100 has smoothed out since the beginning of this year, it would be a problem for NVIDIA. Analysts at Citibank pointed out that a so-called potential air pocket, a gap in AI chip demand, could occur. Morgan Stanley also revealed in a memo about NVIDIA that “there is anxiety on Wall Street about (AI companies) stopping in front of Blackwell.”

NVIDIA’s stock price has skyrocketed nearly 90% since the first half of this year, but it has been faltering since the announcement of Blackwell in March. NVIDIA has made efforts to smoothly manage supply and demand during product upgrades, but there have been many cases where it led to failure due to oversupply. However, when this news was delivered on the 21st, NVIDIA’s stock price finished trading at $953.86, up 0.64%. This indicated that the tech giant was not significantly affected. NVIDIA is scheduled to announce its first-quarter results on the 22nd.

Daniel Kim
content@viewusglobal.com

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