How Nvidia CEO Jensen Huang’s ‘Blackwell joke’ may not be so for the company’s biggest customers

Nvidia CEO Jensen Huang recently made a joke that the company’s biggest customers may not appreciate. The joke was about Nvidia’s latest AI chip-and-server package, Blackwell. The newly introduced Blackwell chips are better than the previous version, Hopper, which was launched in 2022. Several major cloud companies, including Amazon, Microsoft and Google, buy these GPU systems as they use them to train and run the giant models powering generative AI. Facebook-parent Meta has also been buying many of these GPUs in recent years. These companies should be happy about a more powerful GPU like Blackwell as it’s generally good for the AI community. However, there may be a problem as rapid technological advancements (Blackwell) quickly render older versions (Hopper) less valuable, forcing cloud companies to depreciate these assets faster, which in turn can significantly impact their earnings.