Nvidia Seals a Record-Breaking $20B Deal for AI Chip Startup Groq’s Assets
In a move that signifies Nvidia’s most substantial acquisition to date, the chip behemoth has consented to shell out an estimated $20 billion for assets from AI chip startup Groq. This includes a non-exclusive license to Groq’s cutting-edge technology and the onboarding of key executives.
The announcement of the deal was made on December 24, 2024. It encompasses the hiring of Groq’s CEO, Jonathan Ross, a seasoned veteran who played a pivotal role in the creation of Google’s tensor processing unit. Other senior leaders are also part of the package. Groq’s expertise lies in AI inference—a sector where trained artificial intelligence models cater to user requests. This is a market where Nvidia is experiencing escalating competition from both traditional rivals like AMD and emerging startups.
Nvidia’s CEO, Jensen Huang, conveyed in an internal email that the company’s strategy is “to integrate Groq’s low-latency processors into the NVIDIA AI factory architecture.” This acquisition significantly overshadows Nvidia’s previous record of $7 billion for Israeli chip designer Mellanox in 2019. Groq, which was valued at $6.9 billion in a September 2024 funding round, will persist in operating independently, with GroqCloud remaining fully functional. The transaction’s structure as a licensing deal, as opposed to a full acquisition, could potentially circumvent any antitrust issues.
Source: CNBC