Nvidia Acquires Groq’s AI Tech in a Landmark $20 Billion Deal
Nvidia, in its largest acquisition to date, has agreed to license AI chip technology from the startup Groq. The deal, reportedly worth $20 billion, also includes hiring its CEO. Announced on December 24, 2024, this strategic move aims to bolster Nvidia’s foothold in the rapidly expanding AI inference market.
As part of the deal, Nvidia will secure a non-exclusive license to Groq’s specialized inference technology. This technology focuses on low-latency processors designed specifically for AI applications. Jonathan Ross, Groq’s founder and CEO, will join Nvidia along with other senior executives. Ross, who previously contributed to the development of Google’s Tensor Processing Unit (TPU), will assist in integrating the licensed technology into Nvidia’s AI factory architecture.
The transaction follows closely on the heels of Groq’s significant fundraising round. Just three months prior, Groq raised $750 million at a $6.9 billion valuation from investors, including names like BlackRock, Samsung, and Cisco. Despite the deal, Groq will continue to operate as an independent company under new CEO Simon Edwards, with its GroqCloud business remaining unaffected.
This deal underscores a growing trend among major tech companies. More and more, these companies are opting for licensing arrangements and talent acquisitions to rapidly expand their AI capabilities. This approach allows them to bypass the lengthy regulatory approval processes typically associated with traditional mergers.
Source: CNBC