New Nvidia AI Chips Face Issue with Overheating Servers, The Information Reports

The logo of NVIDIA as seen at its corporate headquarters in Santa Clara, California, in May of 2022. Courtesy NVIDIA/Handout via REUTERS/File Photo
The logo of NVIDIA as seen at its corporate headquarters in Santa Clara, California, in May of 2022. Courtesy NVIDIA/Handout via REUTERS/File Photo
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New Nvidia AI Chips Face Issue with Overheating Servers, The Information Reports

The logo of NVIDIA as seen at its corporate headquarters in Santa Clara, California, in May of 2022. Courtesy NVIDIA/Handout via REUTERS/File Photo
The logo of NVIDIA as seen at its corporate headquarters in Santa Clara, California, in May of 2022. Courtesy NVIDIA/Handout via REUTERS/File Photo

Nvidia's new Blackwell AI chips, which have already faced delays, have encountered problems with accompanying servers that overheat, causing some customers to worry they will not have enough time to get new data centers up and running, the Information reported on Sunday.
The Blackwell graphics processing units overheat when connected together in the customized server racks the company has designed, the report said, citing sources familiar with the issue, Reuters reported.
The AI chipmaker has asked its suppliers to change the design of the racks several times to resolve overheating problems, according to Nvidia employees who have been working on the issue, as well as customers and suppliers with knowledge of it, the report said without naming the suppliers.
Nvidia did not immediately respond to a request for comment outside regular business hours.
Nvidia unveiled Blackwell chips in March and had earlier said they would ship in the second quarter before encountering delays, potentially affecting customers such as Meta Platforms , Alphabet's Google and Microsoft.
Nvidia's Blackwell chip takes two squares of silicon the size of the company's previous offering and binds them into a single component that is 30 times speedier at tasks like providing responses from chatbots.



Musk Says Tesla, Samsung Electronics Sign $16.5 Billion Chip Supply Deal 

The Tesla logo is seen at the company's stand during the World Artificial Intelligence Conference (WAIC) at the Shanghai World Expo and Convention Center in Shanghai on July 28, 2025. (AFP) 
The Tesla logo is seen at the company's stand during the World Artificial Intelligence Conference (WAIC) at the Shanghai World Expo and Convention Center in Shanghai on July 28, 2025. (AFP) 
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Musk Says Tesla, Samsung Electronics Sign $16.5 Billion Chip Supply Deal 

The Tesla logo is seen at the company's stand during the World Artificial Intelligence Conference (WAIC) at the Shanghai World Expo and Convention Center in Shanghai on July 28, 2025. (AFP) 
The Tesla logo is seen at the company's stand during the World Artificial Intelligence Conference (WAIC) at the Shanghai World Expo and Convention Center in Shanghai on July 28, 2025. (AFP) 

Tesla CEO Elon Musk said the US automaker had signed a $16.5 billion deal to source chips from Samsung Electronics, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business.

Samsung shares rose more than 4% after the news.

"Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip. The strategic importance of this is hard to overstate," Musk said in a post on X on Monday.

If Musk was referring to Samsung's upcoming Taylor, Texas, plant, the deal could revive the project that has faced delays amid Samsung's struggles to retain and win major customers.

"Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house," Musk said on his social media platform.

Samsung had earlier announced the $16.5 billion chip supply deal without naming the client, saying the customer had requested confidentiality about the details of the deal, which will run through the end of 2033.

Three sources briefed about the matter told Reuters that Tesla was the customer for the deal.

The deal comes as Samsung faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. This lag has weighed heavily on its profits and share price.

Samsung, the world's top memory chip maker, also makes logic chips designed by customers through its foundry business.

Pak Yuak, an analyst at Kiwoom Securities, said the latest deal would help reduce losses at Samsung's foundry business, which he estimated exceeded 5 trillion won ($3.63 billion) in the first half of the year.

Analysts say Samsung has struggled with the defection of key clients to TSMC for advanced chips. TSMC counts Apple, Nvidia and Qualcomm among its customers.

The Samsung-Tesla deal may also be significant for South Korea, which is seeking US partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25% US tariffs.

Samsung is grappling to boost production yields of its latest 2-nanometer technology, but the order is unlikely to involve the cutting-edge tech, said Lee Min-hee, an analyst at BNK Investment & Securities.

Samsung has been losing market share to TSMC in contract manufacturing, underscoring technological challenges the firm faces in mastering advanced chip manufacturing to attract clients like Apple and Nvidia, analysts said.