Microsoft Fuels NVIDIA's Blackwell Boom with Massive Chip Orders

NVIDIA's stock has soared to new heights as the demand for its Blackwell GB200 chip gains momentum. Analyst Ming-Chi Kuo from TF International Securities reported that Microsoft is leading the charge as the largest global customer for the GB200, with a remarkable surge in fourth-quarter orders. Microsoft's order volume for the latter part of this year is set to increase by three to four times, exceeding the combined total of all other cloud service providers.

The expansion of production capacity for the Blackwell chips is expected to commence early in the fourth quarter. Shipment volumes during this period are anticipated to be between 150,000 and 200,000 units. Looking ahead to the first quarter of 2025, shipments are projected to grow significantly by 200% to 250%, reaching between 500,000 and 550,000 units.

Microsoft has been particularly aggressive in its procurement of the GB200 chips. In addition to the previously planned test orders for late 2024 involving the GB200 NVL36, Microsoft is now aiming to secure customized GB200 NVL72 units before the reference design, DGX GB200 NVL72, enters mass production in mid-2025.

In the fourth quarter of 2024, Microsoft's orders for Blackwell chips have jumped from an initial 300-500 cabinets, mainly NVL36, to approximately 1,400-1,500 cabinets. This order consists predominantly of the NVL72 version, representing an impressive growth of up to 400%. Further orders are expected to focus primarily on the NVL72 configuration.

According to Kuo, Microsoft has recently engaged in discussions with key component suppliers regarding expanding production capacity by 1.5 to 2 times or more, to accommodate the steep demand expected in late 2024. Preparations are underway to stockpile components in advance, ensuring a steady supply to meet the increased demand.