Outlook Business Desk
Tech giant Nvidia has agreed to pay $20bn to AI chip startup Groq, acquiring key assets and licensing its high-performance inference technology. The move strengthens Nvidia’s AI portfolio amid growing competition.
Alex Davis of Disruptive, a major investor in Groq, said the deal was completed quickly, even though Groq was not actively seeking a sale. Disruptive has invested over $500mn since 2016.
Groq confirmed a non-exclusive licensing agreement with Nvidia for its inference technology. CEO Jonathan Ross, president Sunny Madra, and other leaders will join Nvidia to help scale and advance the licensed technology.
Simon Edwards becomes Groq’s new CEO as the company continues to operate independently. Nvidia acquires all assets except Groq’s cloud business, which will continue operations without interruption, the company said.
This $20bn deal is Nvidia’s largest to date, surpassing its $7bn Mellanox acquisition in 2019, according to a CNBC report. Nvidia’s cash and short-term investments have risen from $13.3bn to $60.6bn since early 2023.
Nvidia CEO Jensen Huang said the deal will enhance AI offerings. Groq’s low-latency processors will integrate into Nvidia AI factory architecture, expanding the platform for inference and real-time workloads, he noted.
Founded in 2016 by former engineers including Jonathan Ross, who helped build Google’s TPU, Groq focuses on AI inference chips. The company targets $500mn revenue this year, driven by strong AI demand.
Three months ago, Groq also raised $750mn at a $6.9bn valuation, attracting investors including BlackRock, Neuberger Berman, Samsung, Cisco, Altimeter and 1789 Capital, the latter including Donald Trump Jr. as a partner.