Nvidia expects gaming chip shortage to last through year-end

Nvidia has indicated that a global shortage of gaming chips may persist until the end of 2026, affecting its gaming business in the near term.

The company’s CFO, Colette Kress, said supply constraints are expected to remain tight for several quarters, despite ongoing demand for chips.

The shortage is driven by increased demand for memory chips used in AI applications, which has led manufacturers to prioritize higher-margin data center components.

This has limited supply for consumer electronics, including smartphones, PCs, and gaming consoles.

Nvidia chips are used in PC gaming and in consoles like the Nintendo Switch, while Sony’s PlayStation and Microsoft’s Xbox use AMD hardware.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Nvidia’s data center revenue dwarfs its gaming business by about 17-to-1

Nvidia chases AI hardware volume because its Data Center division brought in $62 billion in the fourth quarter, while Gaming reached $3.7 billion 1.
The gap keeps growing as newer lines expand, including Sovereign AI, AI infrastructure built for national governments and public institutions, which more than tripled to over $30 billion for the full fiscal year 2.
Revenue also comes from beyond GPUs (graphics processing units), since the Networking unit sells the high-speed links that connect AI systems and logged $11 billion in quarterly revenue 3.

The AI boom is reshaping innovation priorities across industries

More top-end chips going to AI helps explain Nvidia’s view that a worldwide shortage of gaming chips could last through the end of 2026, which could limit PC parts and consoles using Nvidia chips such as the Nintendo Switch.
CEO Jensen Huang sums up the incentive with “compute equals revenues,” and Nvidia said Meta’s GEM model upgrades led to a 3.5x jump in ad clicks on Facebook 4.
Putting its newest manufacturing capacity into data centers speeds work on agentic AI, systems that can plan and take actions, plus physical AI, AI that powers robots and machines, which Nvidia calls the next big waves 5.
That push steers the strongest chips toward “AI factories,” large-scale data centers for training and running AI models, rather than consumer entertainment.