Nvidia Partners with Menlo Micro to Accelerate AI Chip Testing by Up to 90%

Nvidia, Menlo Micro collaboration speeds up AI chip testing

Nvidia and Menlo Micro developed new switching chips that accelerate AI-chip testing by 30-90%, easing a major production bottleneck. Menlo's micro-metal switches boost performance of outdated test boards as Nvidia races to meet soaring demand. Nvidia and Menlo Micro on Wednesday said they have used technology from the startup to dramatically speed up the testing of AI chips, easing a significant production bottleneck. The world's most valuable listed company and the central player in the AI boom has been working to iron out kinks in its processes as it works to feed seemingly insatiable demand for its chips. It reports earnings after market close on Wednesday, with analysts expecting sales growth of 56% to $56.9 billion, LSEG data showed. Even so, with valuations of AI companies sky-high, investors are watching for any signs of a bursting bubble. Nvidia has sold millions of artificial intelligence chips, each of which has to be tested before sale by placing it on a specialized circuit board designed to determine whether it meets design goals such as speed and other functions. Whereas the AI chips are cutting edge, however, many of the chips in the circuit boards for testing them are decades old. That makes testing the AI chips, which consume huge amounts of power and communicate at some of the fastest speeds in the industry, a challenge. To address the bottleneck, Nvidia has been working with Menlo Micro, a startup spun out from GE in 2016 and which has raised $227.5 million in funding from Corning and the venture fund of iPhone co-creator Tony Fadell. The result is a set of switching chips that improve the performance of test boards. Menlo Micro's chips use switches made out of metal, similar to a light switch on a wall but fabricated at the scale of microchips using technology from a field called micro-electromechanical systems. In a research paper published on Wednesday, engineers from the two firms said testing of Nvidia's graphics processing units (GPU) could be sped up by 30% to 90% depending on the kind of test being performed. Russ Garcia, Menlo Micro's chief executive, declined to say how much business the startup is doing with Nvidia but said other major chipmakers are adopting its switching chips for testing boards as well. "The bottom line is, if you don't validate the GPUs before you get into the data center, you're going to have errors and other issues. This is the only way to validate these things at speed," Garcia said in an interview.

Nvidia Taps Startup Menlo Micro To Fix Bottleneck In AI Chip Testing - NVIDIA (NASDAQ:NVDA)

Investors are zeroed in on Nvidia Corp.'s (NASDAQ:NVDA) earnings this week as analysts say bullish forces could still drive a year-end tech rally despite recent profit-taking. With Nvidia powering the AI boom and holding "half a trillion dollars" in future orders, market strategists argue the chances of a late-year equity melt-up outweigh fears of an AI bubble. Nvidia and startup Menlo Micro said Wednesday that their collaboration has significantly accelerated the testing of AI chips, helping the semiconductor giant ease a major production bottleneck as demand continues to soar. Also Read: Nvidia Powers $500 Million AI Factory In Taiwan As Global Race For Smarter Tech Heats Up Every Nvidia AI chip must undergo rigorous testing on a specialized circuit board to ensure it meets performance standards -- including power and speed -- before reaching customers. But while the graphics processing units or GPUs themselves represent the cutting edge of technology, many components on the test boards rely on decades-old designs, making it difficult to test high-power, high-speed chips efficiently. To solve that challenge, Nvidia partnered with Menlo Micro, a GE-spinoff founded in 2016 that has raised $227.5 million from Corning Inc (NYSE:GLW) and the venture fund led by Apple Inc (NASDAQ:AAPL) iPhone co-creator Tony Fadell, Reuters reported. The company's metal-based microswitch chips -- built using micro-electromechanical systems (MEMS) technology -- boost the performance of the boards used to validate Nvidia GPUs. Engineers at both companies reported in a newly published research paper that their solution cuts testing time by 30% to 90%, depending on the specific test. Nvidia has been working to streamline manufacturing processes to keep up with orders. The company will report its quarterly earnings after Wednesday's market close, and analysts expect revenue to jump 56% to $56.9 billion, according to LSEG data. The Nasdaq Composite fell 0.84% on Monday as investors sold off major technology stocks. Apple, Meta Platforms Inc (NASDAQ:META), and Oracle Corp (NYSE:ORCL) each slid more than 1%, and artificial-intelligence chip leader Nvidia performed even worse, dropping nearly 2%, CNBC reported. Investors remain laser-focused on Nvidia ahead of its third-quarter earnings report on Wednesday. CEO Jensen Huang said in October that the company has "half a trillion dollars" in orders scheduled for 2025 and 2026, a comment that fueled huge expectations for future demand. Because Nvidia sits at the center of the AI boom -- alongside OpenAI -- any hint of slower-than-expected growth could hit the stock hard. "If they offer even slightly muted guidance or forecast for chip demand, the market would take that poorly," Ross Mayfield, investment strategist at Baird told CNBC. Even with recent profit-taking in tech over steep valuations and high spending, several analysts still expect stocks to rally into December. Michael Graham, an analyst at Canaccord Genuity, wrote Monday that bullish and bearish forces remain balanced, but he still predicts a year-end upswing. HSBC's chief multi-asset strategist Max Kettner echoed that view, saying the chances of a late-year "melt-up" -- especially in equities -- outweigh the risk of an AI bubble bursting anytime soon. NVDA Price Action: Nvidia shares were up 2.13% at $185.22 at the time of publication on Wednesday, according to Benzinga Pro data. Read Next: Why Nvidia's Next Earnings Could Decide Where Global Markets Head Next Photo: Shutterstock NVDANVIDIA Corp$185.312.18%OverviewAAPLApple Inc$270.181.02%GLWCorning Inc$81.711.98%METAMeta Platforms Inc$587.33-1.73%ORCLOracle Corp$224.471.81%Market News and Data brought to you by Benzinga APIs