Nvidia Closes Monumental $20B Acquisition with AI Chip Pioneer Groq
Nvidia has finalized its most substantial acquisition to date, securing a $20 billion licensing agreement with AI chip startup Groq. This agreement grants Nvidia the rights to Groq’s inference technology assets and key personnel. Announced on December 23, 2025, this strategic move allows the AI chip behemoth to broaden its horizons beyond GPUs and venture into the burgeoning AI inference chip market.
As part of the agreement, Groq’s founder and CEO Jonathan Ross, President Sunny Madra, and other senior engineers will join the Nvidia team. Their primary role will be to integrate and scale the licensed technology. Groq, established in 2016 by ex-Google engineers, is renowned for its Language Processing Units (LPUs) specifically designed for AI inferencing workloads. These LPUs provide faster and more energy-efficient performance for certain AI models compared to traditional GPUs.
The transaction is nearly triple Groq’s most recent valuation of $6.9 billion from a funding round in September 2025. Analysts perceive this deal as a strategic move by Nvidia to eliminate potential competition while acquiring cutting-edge inference technology. Post-acquisition, Groq will continue its operations as an independent entity under the new CEO Simon Edwards, with its GroqCloud platform remaining operational.
Source: CNBC