Nvidia’s Record-Breaking $20 Billion Groq Tech Licensing Deal
In a move that signifies Nvidia’s largest acquisition to date, the AI chip titan has agreed to license technology from the AI chip startup, Groq. This deal, valued at an estimated $20 billion, also includes the hiring of key executives from Groq. Investors report that the transaction was assembled swiftly, marking a significant milestone in the fiercely competitive AI chip market.
Established in 2016, Groq had recently raised $750 million just three months prior at a valuation of $6.9 billion. This funding round saw backing from major investors such as BlackRock, Neuberger Berman, Samsung, and Cisco. As part of the agreement, Groq CEO Jonathan Ross and President Sunny Madra will join the ranks of Nvidia to help develop and scale the licensed technology. Meanwhile, Groq will maintain its operations as an independent company under the leadership of finance chief and newly appointed CEO, Simon Edwards. Groq’s cloud business, GroqCloud, will continue its operations as usual.
This deal significantly overshadows Nvidia’s previous record acquisition—the $7 billion purchase of Israeli chip designer Mellanox in 2019. As of late October, with over $60 billion in cash and short-term investments, Nvidia is well-equipped to make strategic moves in the AI infrastructure space. This licensing agreement follows a recent trend where tech giants acquire both talent and technology through non-traditional deals. This pattern is also observed in recent moves by other tech behemoths like Meta, Google, and Microsoft in the ongoing AI talent race.
Source: CNBC