Nvidia Secures Monumental $20B Licensing Agreement with AI Chip Pioneer Groq
In a game-changing move that redefines the AI chip industry, Nvidia has forged a non-exclusive licensing agreement with AI trailblazer Groq. The deal, estimated at a staggering $20 billion, was unveiled on December 24, 2025. This monumental transaction stands as Nvidia’s most significant to date, eclipsing its $7 billion procurement of Mellanox in 2019.
As per the agreement, Nvidia will license Groq’s innovative inference technology and amalgamate the startup’s low-latency processors into its AI factory architecture. Jonathan Ross, Groq’s founder and CEO, together with President Sunny Madra and other top-tier executives, will join forces with Nvidia. Their mission: to further develop and scale the licensed technology. Meanwhile, Groq will persist as an independent entity under the leadership of new CEO Simon Edwards, ensuring the uninterrupted operation of its GroqCloud platform.
This strategic deal underscores Nvidia’s determination to retain supremacy in the burgeoning AI hardware market. Groq, valued at $6.9 billion in a recent September financing round, is renowned for its Language Processing Units (LPUs) crafted for efficient AI inference tasks. Industry pundits perceive this transaction as a tactical move by Nvidia to fortify its position against rivals such as AMD and Intel.
Source: CNBC