Nvidia Customers Get ‘Emotional’ as AI Chips Run Short

A limited supply of Nvidia’s chips has reportedly left its customers frustrated.

“The demand on it is so great, and everyone wants to be first and everyone wants to be best,” Jensen Huang, CEO of the nearly $3 trillion company, said Wednesday (Sept. 11).

“We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can,” added Huang, whose comments at a Goldman Sachs tech conference were reported by Bloomberg News.

According to the report, Nvidia is seeing robust demand for its latest generation of chips, called Blackwell, The company outsources the production of its hardware, and Nvidia’s suppliers are progressing in catching up, Huang told his audience.

Nvidia’s chips help develop and run artificial intelligence (AI) models at data centers. The firm’s sales have soared amid intense appetite for these services, with Nvidia becoming — for a time — the largest company in the world earlier this year. (As of Wednesday afternoon, it was in the number three spot, behind Apple and Microsoft).

However, Bloomberg notes, Nvidia relies on a smaller portion of its customers — data center operators like Meta and Microsoft — for the bulk of its revenues.

Huang was asked if the vast amounts of spending on AI is giving customers a return on investment, something that’s been a concern during the tech sector’s AI fever.

He said companies have no choice but to embrace “accelerated computing,” adding that his firm’s technology speeds up conventional workloads — data processing — while handling AI tasks that older technology can’t.

PYMNTS examined Nvidia’s meteoric rise last month, noting that it hasn’t come without turbulence. The company’s stock saw a 20% slump through July and early August, a sign of investor concerns about its ability to meet sky-high expectations. Questions linger about the sustainability of AI-related spending by major tech firms.

“Nvidia faces mounting regulatory scrutiny as well. U.S. regulators are probing whether the company has pressured cloud providers to buy multiple products or attempted to bundle its networking equipment with AI chips,” that report said.

“Competition in the AI chip market is intensifying. Long-time rival AMD is making strides with its own AI processors, while tech giants like Google and Amazon are developing custom silicon for their data centers. In China, where U.S. export restrictions limit Nvidia’s reach, domestic champion Huawei is emerging as a formidable competitor.”