(Credit: Nikos Pekiaridis/NurPhoto via Getty Images)
The downside to being the world's biggest graphics card seller is that sometimes those GPUs go bad, and Nvidia has to cover it. According to WarrantyWeek, Nvidia is now paying out over 11x as much for warranty-returned GPUs as it was two years ago. AMD's warranty payouts doubled over the same time period.
Nvidia had a 0.17% warranty claim rate for its graphics cards at the start of 2025, but that reached 0.9% by the end of the year. This pulled Nvidia's warranty rate above AMD's for the first time in a long time, but AMD increased from 0.4% to 0.7% throughout that same period.
This resulted in both companies paying out a lot more for replacement graphics cards. Nvidia spent $81 million on warranty claims in 2024, but over $894 million in 2025. In contrast, AMD spent $110 million in 2024 and up to $238 million in 2025.
This is a larger jump than either company has had in their history, though AMD's have risen dramatically since 2019. Nvidia's best historical analog is in 2009-2011, where it was forced to pay out hundreds of millions of dollars to cover defective laptop GPUs supplied to Apple, HP, and Dell, but even that was a drop in the bucket compared with its 2025 totals.
(Credit: Josh Edelson / AFP via Getty Images)There were several factors that could have affected this in 2025. Nvidia launched the new RTX 50-series of Blackwell graphics cards at the start of the year. New generations of hardware are always going to spike failure rates as kinks in the manufacturing and design process are worked out. But the RTX 50 cards, particularly the high-end models with higher power draw, suffered from a melting power cable issue that still hasn't been fully resolved in 2026.
Arguably a more likely contributor to these big warranty totals, though, was the huge increase in Nvidia GPU sale volume to data centers for AI training and inference workloads. Although these will be managed by professional staff members and cooled using industrial systems, the high intensity of their workloads and the greater quantity they're being used in will still result in failed cards. Given that enterprise hardware is sold at a premium, affected companies will want a return on their defective products.
Nvidia may have seen this coming, though. WarrantyWeek also notes that Nvidia increased its warranty reserve fund by over six times in 2024 to $2.59 billion and then tripled it again in 2025, bringing the total to $8.22 billion by the end of the year. AMD also holds over $1 billion in reserve to cover defective returns. Nvidia certainly has enough money on hand to cover it.