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Nvidia CEO says orders for 3.6 million Blackwell GPUs exclude Meta

Nvidia CEO says orders for 3.6 million Blackwell GPUs exclude Meta

  • 19.03.2025 22:50
  • crn.com.au
  • Keywords: danger, success

Nvidia CEO Jensen Huang revealed that orders for 3.6 million Blackwell GPUs from top cloud providers exclude Meta, a major customer, signaling strong demand despite Meta's absence. He also highlighted plans to shift production to the U.S., with TSMC investing $100 billion in new facilities, amid concerns over tariffs and competition in AI chip manufacturing.

Nvidia NewsNVDAsentiment_satisfiedMETAsentiment_dissatisfied

Estimated market influence

Nvidia

Nvidia

Positivesentiment_satisfied
Analyst rating: Strong buy

Nvidia's CEO Jensen Huang discussed the company's chip orders and market position during a conference call.

Meta Platforms

Meta Platforms

Negativesentiment_dissatisfied
Analyst rating: Strong buy

Meta was excluded from the initial orders of 3.6 million Blackwell GPUs, impacting Nvidia's reported demand figures.

Context

Analysis of Business Insights and Market Implications

Key Facts and Data Points

  • Order Volume: Nvidia received orders for approximately 3.6 million Blackwell GPUs, excluding key customer Meta.
  • Meta's Spending: Meta plans to spend up to $65 billion on AI infrastructure this year, with a significant portion expected to go toward Nvidia chips.
  • DeepSeek Competition: DeepSeek’s focus on reasoning capabilities in its AI model may increase demand for computation and Nvidia chips despite initial lower chip usage.
  • Stock Performance: Nvidia shares rose by nearly 2% after the analyst call, but fell 3.4% earlier due to investor skepticism about Huang's market pivot claims.
  • Production Shift: Nvidia is considering moving production to the U.S. in the long term, with TSMC planning a $100 billion investment in the U.S., including five new chip facilities.

Market Trends and Business Impact

  • AI Chip Demand: The exclusion of Meta from the initial 3.6 million orders highlights potential underrepresentation of demand, suggesting strong underlying interest in Blackwell GPUs.
  • Competitive Landscape: While DeepSeek’s model may use fewer chips initially, its focus on reasoning could drive long-term demand for Nvidia's high-performance chips.
  • Investor Sentiment: Huang's comments aimed to reassure investors about Nvidia's position in the AI market, despite concerns over rising competition and shifting market dynamics.

Competitive Dynamics

  • Meta's Role: Meta is a major customer for Nvidia, and its planned spending underscores the importance of Nvidia's chips in AI infrastructure.
  • TSMC's Expansion: TSMC's $100 billion investment in the U.S. signals a strategic shift in semiconductor production, potentially impacting global supply chains and competition.

Strategic Considerations

  • Onshoring Production: Nvidia’s consideration to move production to the U.S. aligns with broader industry trends driven by geopolitical factors and tariff policies.
  • Market Pivot: Huang emphasized that businesses are shifting from AI model training to detailed answer generation, positioning Nvidia's chips for continued relevance in this evolving landscape.

Long-Term Effects and Regulatory Impacts

  • Production Shift: While no timeline was provided, the long-term move to U.S. production could influence pricing, supply security, and regulatory compliance.
  • Global Supply Chains: TSMC’s U.S. expansion may alter semiconductor manufacturing dynamics, potentially affecting competition and market access.

Conclusion

Nvidia's position in the AI chip market remains strong, with significant demand from major tech players like Meta. However, competition and shifting market dynamics require careful strategic planning, particularly regarding production shifts and investor communication.