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Nvidia Corporation is set to gear up the production of at most 450,000 artificial intelligence (AI) GPUs based on its highly anticipated Blackwell architecture in the fourth quarter of 2024, according to Morgan Stanley’s analysts. This production surge is expected to translate into a staggering revenue opportunity exceeding $10 billion, marking a pivotal moment for the tech giant as it continues to dominate the AI hardware market.
Nvidia’s CEO, Jensen Huang, confirmed during the Goldman Sachs Communacopia + Technology Conference that the company is ramping up production of the Blackwell GPUs, stating, “We’ll ship in Q4 and scale it—start scaling in Q4 and into next year. And the demand on it is so great… and so the intensity is really, really quite extraordinary.”
The Blackwell architecture has been the subject of scrutiny over the past few months regarding a minor design flaw that was identified earlier this year. However, analysts from Morgan Stanley noted that the company continues to produce the GPUs in significant quantities, with expectations of strong demand from major customers driving this growth.
While initial rumors suggested a price point of around $70,000 per unit, Nvidia is expected to sell these high-demand GPUs for approximately $22,000 each. This pricing adjustment is likely aimed at ensuring competitive positioning while the market is still tolerating AI as its main source of capitalization.
Furthermore, Nvidia plans to sell complete AI server cabinets, such as the NVL36 and NVL72, which house multiple Blackwell GPUs. This is a notable decision, as the NVL36 features 36 B200 GPUs and is expected to retail between $1.8 million and $2 million, while the NVL72, with 72 B200 GPUs, is projected to start at $3 million.
Nvidia’s advancements with the Blackwell architecture position it favorably against competitors such as AMD and Intel. The Blackwell GPUs are designed to meet the increasing demand for AI chips driven by rapid advancements in generative AI. Major cloud providers and tech companies—including Amazon Web Services, Google, Microsoft, and Oracle—have already placed orders for Blackwell GPUs, indicating strong market confidence in Nvidia’s capabilities.
Nvidia’s projected revenue from Blackwell GPUs aligns with its historical performance trajectory. The company has consistently demonstrated strong growth in its data center segment; for example, Nvidia reported revenue of $26.3 billion from its data center alone, according to its Q2 earnings report, which is 16% higher than the previous quarter and up 124% from a year ago.
As Nvidia ramps up production of its Blackwell GPUs, it not only solidifies its position as a leader in the AI hardware market but also sets the stage for future innovations within the tech industry.
