Nvidia, Menlo Micro collaboration speeds up AI chip testing
![Item 1 of 2 A switching chip, manufactured by Menlo Micro, an Irvine, California-based company, and used by Nvidia to test and validate its AI chips, November 18, 2025. REUTERS/Stephen Nellis [1/2]A switching chip, manufactured by Menlo Micro, an Irvine, California-based company, and used by Nvidia to test and validate its AI chips, November 18, 2025. REUTERS/Stephen Nellis Purchase Licensing Rights, opens new tab](/_next/image?url=https%3A%2F%2Fwww.reuters.com%2Fresizer%2Fv2%2FUEV6BOU2X5IKBDTJQTPFGKQGXM.jpg%3Fauth%3D10ed671ac5f5da404174167e5b404222ab7550b1394c03b08c15d363a49302d3%26width%3D1200%26quality%3D80&w=1920&q=75)
News Summary
Nvidia and startup Menlo Micro have announced a collaboration that utilizes Menlo Micro's technology to dramatically speed up the testing of AI chips, thereby easing a significant production bottleneck. This development comes as Nvidia, the world's most valuable listed company, works to streamline its processes to meet the seemingly insatiable demand for its AI chips. AI chips are tested by placing them on specialized circuit boards to ensure they meet design goals. However, while AI chips are cutting-edge, many components on these test boards are decades old, posing a challenge for testing high-power, high-speed AI chips. Menlo Micro's switching chips, which use metal switches fabricated with micro-electromechanical systems (MEMS) technology, can accelerate Nvidia's graphics processing unit (GPU) testing by 30% to 90%, depending on the test. Russ Garcia, Menlo Micro's chief executive, stated that other major chipmakers are also adopting their switching chips for testing boards, underscoring the critical need to validate GPUs at speed to prevent errors in data centers.
Background
Nvidia holds a central position in the current AI boom, facing immense demand for its AI chips. However, with AI company valuations sky-high, investors remain vigilant for any signs of a bursting bubble. The company is actively working to iron out kinks in its production processes to satisfy the market's seemingly insatiable demand. Testing AI chips is a critical step in the production workflow to ensure products meet design specifications. However, a significant production bottleneck has emerged due to the technological disparity between cutting-edge AI chips and the older technology often used in testing equipment. Menlo Micro, a startup spun out from GE in 2016, specializes in developing switching chips based on micro-electromechanical systems (MEMS) technology and has raised $227.5 million in funding. Its technology is designed to address the challenges in high-power, high-speed chip testing.
In-Depth AI Insights
What does this collaboration reveal about the underlying challenges in scaling AI chip production and Nvidia's strategic response? - It highlights that the AI boom's bottleneck isn't solely manufacturing capacity but also critical infrastructure like testing. Nvidia's proactive engagement with Menlo Micro underscores its commitment to maintaining market dominance by addressing every facet of the supply chain. This suggests a strategic pivot towards optimizing the entire ecosystem rather than just chip design or fabrication. - Improved testing speed means Nvidia can bring products to market faster and potentially increase yield, maintaining its lead in a highly competitive AI chip market. This is crucial for meeting "insatiable" market demand and effectively managing investor concerns about a "bubble" amidst high valuations. How might Menlo Micro's technology impact the broader semiconductor industry beyond Nvidia, and what are the competitive implications? - Menlo Micro's CEO indicated that other major chipmakers are adopting their switching technology, suggesting that a new standard for high-speed, high-power chip testing could emerge, making it a critical enabling technology. - For chipmakers, this technology can reduce time-to-market and increase yield, offering a competitive advantage, especially in high-end computing. This points to an increasing reliance on specialized component suppliers within the semiconductor industry, creating new investment opportunities in niche technology providers. Given the context of the incumbent Trump administration's "America First" tech policies, what strategic implications might this US-based technological advancement have? - The development of this critical testing technology by a US startup (Menlo Micro) and its adoption by a leading US chipmaker (Nvidia) aligns well with the Trump administration's focus on bolstering domestic technological leadership and supply chain resilience. This enhances the strategic position of the US in the global semiconductor supply chain, reducing reliance on specific overseas segments. - Furthermore, the improved testing efficiency could further solidify US advantages at the forefront of AI technology, positioning it favorably in international tech competition. This has potential implications for national security and provides additional policy support and market impetus for domestic technological innovation.