Nvidia’s new Blackwell GPUs have made older Hopper models less useful, affecting cloud giants such as Amazon, Microsoft, and Google. The rapid advancements in technology are forcing these companies to adjust their asset depreciation, which can dent earnings.
Amazon was the first to take action, reducing the lifespan of its servers from 6 years to 5 years starting in January 2025, with a resulting operating income hit of about $700 million. Nvidia CEO Jensen Huang joked that his biggest customers won’t find the change funny, as it means they can no longer give away Hopper GPUs.
The shift is largely driven by AI obsolescence, where new technology improves at rapid pace making previous versions less useful and valuable. This requires cloud companies to reduce asset depreciation, which can significantly impact earnings. Analyst Ross Sandler warned investors that these adjustments could be substantial, with Meta potentially facing a $5 billion hit in 2026.
While one giant cloud provider taking action doesn’t mean others will follow the same path, the technology advancements have created significant changes in the industry. As Nvidia’s Blackwell GPUs become more powerful, companies must adapt to avoid becoming obsolete too quickly.
Source: https://www.businessinsider.com/nvidia-ceo-jensen-huang-joke-blackwell-hopper-gpu-customers-2025-3