Nvidia signs a record $20 billion deal for assets of Groq startup
American chipmaker Nvidia has agreed to acquire the assets of startup Groq for about $20 billion in cash. This is the largest deal in the history of Nvidia and a significant step in expanding the company's capabilities in the field of artificial intelligence. It was reported by The Public with reference to CNBC.
According to Alex Davis, head of the Disruptive fund, who led Groq's latest round of funding, the agreement was reached quickly. Only three months ago, Groq raised $750 million at a valuation of about $6.9 billion. Investors in the round included BlackRock, Neuberger Berman, as well as Samsung, Cisco, Altimeter, and 1789 Capital.
Officially, Groq calls the deal a non-exclusive licensing agreement for inference technologies. Founder and CEO Jonathan Ross, company president Sunny Madra, and other top executives will join Nvidia to scale licensed solutions. At the same time, Groq says it will continue to operate as an independent company under the leadership of CFO Simon Edwards. The GroqCloud cloud business is not part of the deal and will continue to operate without interruption.
In a letter to employees, Nvidia CEO Jensen Huang noted that the integration of Groq's low-latency processors will expand the NVIDIA AI Factory architecture and enable it to serve a wider range of inference and real-time tasks. He emphasised that Nvidia is not acquiring Groq as a company, but only its intellectual property and team of specialists.
This is an unprecedented purchase for Nvidia. Previously, the largest deal was the acquisition of Mellanox in 2019 for almost $7 billion. As of the end of October, Nvidia had $60.6bn in cash and short-term investments, up from $13.3bn at the beginning of 2023, which made it possible to finance the deal.
Groq was founded in 2016 by Google execs, including Jonathan Ross, who was involved in the creation of TPU. The company was targeting revenues of around $500 million in 2025 amid growing demand for AI accelerators. The deal with Nvidia highlights a general trend of tech giants investing billions of dollars in talent and specialised AI solutions to maintain market leadership.
Фото: NVIDIA