Nvidia: “The Bill Comes Due”

Delays in Blackwell

In one of Doctor Strange’s most chilling moments, Mordo delivers a warning that echoes through time itself: “The bill always comes due.” It’s a lesson about the dangers of shortcuts—a triumphant victory achieved at the expense of tampering with forces beyond control, with consequences lurking unseen. Nvidia’s story in the financial world mirrors this narrative. After soaring to the dizzying heights of a $3.7 trillion valuation recently, Nvidia celebrated its dominance, driven by record-breaking revenues and a seemingly unstoppable rise in the AI hardware market. But now, the cost of those victories is coming into focus. Beneath the surface of its meteoric ascent lie the cracks of accounting maneuvers, deferred promises, and growing operational struggles—most notably the delays and technical failings of its much-hyped Blackwell AI chips. The moment of reckoning may be closer than Nvidia or its investors dare to admit.

Blackwell’s Rocky Road: Delays and Overheating

Nvidia’s Blackwell AI chips were supposed to cement its leadership in AI computing, but delays and technical flaws have turned this crown jewel into a liability. Initially postponed by three months in mid-2024 due to design flaws, Blackwell GPUs are now plagued by overheating issues when integrated into custom server racks. These problems have forced Nvidia to rework designs with suppliers, delaying shipments further into 2025.

Major customers like Microsoft, Amazon Web Services (AWS), Google, and Meta Platforms have reportedly scaled back or delayed orders for Blackwell-equipped racks. For instance;

• Microsoft (NASDAQ: MSFT): Shifted to older-generation H200 chips in its Phoenix data center.

• Amazon Web Services (NASDAQ: AMZN), Google (NASDAQ: GOOGL), and Meta Platforms (NASDAQ: META): Reportedly cut back on orders of Blackwell GB200 racks.

These setbacks have cast doubt on Nvidia’s ability to meet the lofty expectations baked into its sky-high valuation, which hinges on the assumption of sustained 30% growth in 2025.

For our previous Nvidia Accounting Red flag articles:

1. Nvidia Game of Shadows

2. Nvidia AR Increase

Deferred Revenue: The Bill That is Due