Nvidia has informed Microsoft and at least one other cloud provider that the production of its new "Blackwell" B200 AI chips will be delayed by at least three months due to a design flaw. This information comes from sources, including a Microsoft employee, as reported by The Information.

The B200 chips are the successors to the highly sought-after H100 chips, which have been integral to powering the AI cloud infrastructure and contributing significantly to Nvidia's market value. Despite the delay, Nvidia expects to ramp up production of the B200 chips in the second half of the year, according to a statement from Nvidia spokesperson John Rizzo shared with The Verge. Rizzo added, "Beyond that, we don’t comment on rumors."

Nvidia is currently conducting additional test runs with Taiwan Semiconductor Manufacturing Company (TSMC) and plans to ship large quantities of the Blackwell chips by the first quarter of the next year. The Information reports that tech giants like Microsoft, Google, and Meta have collectively ordered "tens of billions of dollars" worth of these chips.

This delay follows Nvidia's earlier announcement that "Blackwell-based products will be available from partners" starting in 2024.

The new chips are expected to initiate a new annual cycle of AI chip releases from Nvidia as the company faces increasing competition from other tech firms like AMD.