AI Chip Startup Groq Secures $640M Funding, Valued at $2.8 Billion

AI chip startup Groq valued at $2.8 bln after latest funding round

Aug 5 (Reuters) - Semiconductor startup Groq said on Monday it has raised $640 million in a Series D funding round led by Cisco Investments, Samsung Catalyst Fund and BlackRock Private Equity Partners, among others, bringing its valuation to $2.8 billion. The Silicon Valley firm, founded by a former Alphabet engineer, specializes in producing AI inference chips - a type of semiconductor that optimizes speed and executes commands of pre-trained models. Besides big firms such as Advanced Micro Devices, many startups including Groq have been trying to nibble away at Nvidia's dominant position in the booming AI chip industry. Last year, Groq adapted Meta Platforms' large language model, LLaMA, to be able to run on its own chips rather than those of Nvidia's. Meta researchers built LLaMA using Nvidia's chips. Cloud service providers racing to develop their own AI products are also seeking alternatives to Nvidia's top-of-the-line processors due to high demand but limited supply. In 2021, Groq was valued at $1.1 billion after a funding from Tiger Global Management and D1 Capital. "Groq will use the funding to scale the capacity of its tokens-as-a-service (TaaS) offering and add new models and features to the GroqCloud," the company said about the latest round of funds. Groq will deploy more than 108,000 Language Processing Units manufactured by Global Foundries by the end of the first quarter of 2025. Groq has also announced the appointment of Stuart Pann, a former senior executive at Intel and HP Inc, as its chief operating officer, while Meta's chief AI scientist Yann LeCun was named its newest technical adviser. (Reporting by Zaheer Kachwala in Bengaluru; Editing by Shreya Biswas)

AI chip startup Groq valued at $2.8 billion after latest funding round

The Silicon Valley firm, founded by a former Alphabet engineer, specializes in producing AI inference chips - a type of semiconductor that optimizes speed and executes commands of pre-trained models.Semiconductor startup Groq said on Monday it has raised $640 million in a Series D funding round led by Cisco Investments, Samsung Catalyst Fund and BlackRock Private Equity Partners, among others, bringing its valuation to $2.8 billion. The Silicon Valley firm, founded by a former Alphabet engineer, specializes in producing AI inference chips - a type of semiconductor that optimizes speed and executes commands of pre-trained models. Besides big firms such as Advanced Micro Devices, many startups including Groq have been trying to nibble away at Nvidia's dominant position in the booming AI chip industry. Last year, Groq adapted Meta Platforms' large language model, LLaMA, to be able to run on its own chips rather than those of Nvidia's. Meta researchers built LLaMA using Nvidia's chips. Cloud service providers racing to develop their own AI products are also seeking alternatives to Nvidia's top-of-the-line processors due to high demand but limited supply. In 2021, Groq was valued at $1.1 billion after a funding from Tiger Global Management and D1 Capital. "Groq will use the funding to scale the capacity of its tokens-as-a-service (TaaS) offering and add new models and features to the GroqCloud," the company said about the latest round of funds. Groq will deploy more than 108,000 Language Processing Units manufactured by Global Foundries by the end of the first quarter of 2025. Groq has also announced the appointment of Stuart Pann, a former senior executive at Intel and HP Inc, as its chief operating officer, while Meta's chief AI scientist Yann LeCun was named its newest technical adviser.

AI chip start-up Groq's value rises to $2.8bn as it takes on Nvidia

Semiconductor start-up Groq has raised $640mn from investors including BlackRock as it aims to challenge Nvidia's dominance of the booming market for artificial intelligence chips. The funding round, led by BlackRock Private Equity Partners alongside strategic investors including Cisco and Samsung Catalyst Fund, values Groq at $2.8bn, more than double its last valuation of $1.1bn in 2021. Yann LeCun, chief AI scientist at Meta, the social media giant that owns Facebook and Instagram, will also become a technical adviser to the company. Silicon Valley-based Groq is one of a number of chipmakers that have benefited from a surge in usage of artificial intelligence models. High-powered chips are the essential hardware used to train and run chatbots such as OpenAI's ChatGPT or Google's Gemini. By far the largest player in the sector is Nvidia, whose flagship graphics processing units, or GPUs, are used to train cutting-edge AI models. Last month SoftBank acquired Graphcore, another UK-based AI chipmaker, in a $600mn deal. Several big tech companies, including Microsoft, Google, Amazon and Meta, are also developing their own AI accelerator chips. While Nvidia's chips, such as its latest H100 processor, can be used to both build and run large AI models, Groq's technology focuses on deployment, by accelerating the speed with which chatbots can respond. Groq's language processing unit, or LPU, is designed only for AI "inference" -- the process in which a model uses the data on which it was trained, to provide answers to queries. The start-up, founded in 2016, claims its LPUs are faster and more power efficient than chips from rivals, including Nvidia. The new funding will go towards boosting the company's capacity for computational resources required to run AI systems, said Groq chief executive Jonathan Ross, a former Google engineer who was a founding member of the team behind its own in-house AI chips. Groq will roll out more than 108,000 LPUs by the end of March 2025, Ross said, adding that his aspiration was to handle half the world's inference by the end of next year. "We aim for a full dollar returned for every dollar we spend on hardware. We don't intend to lose money," said Ross. BlackRock will play a key role, he said: "We were looking for [an investor] we could partner with for a long time. BlackRock can do public and private . . . There are things we want to do beyond a pure equity raise." Groq had been seeking to raise new funding and held discussions with investors over several months, according to people familiar with the matter. The company has yet to generate significant revenue, making the investment decision effectively a bet on the company's technology, they added. During the fundraise, Groq board member Jay Zaveri was abruptly sacked from Chamath Palihapitiya's venture capital firm Social Capital. The situation at Social Capital -- an early investor in the company -- "didn't really factor in" to the fundraising, said Ross. Zaveri has been replaced on Groq's board by Social Capital partner Steve Trieu. Groq has partnered with a number of companies, including Meta and Samsung, and sovereign nations including Saudi Arabia to manufacture and roll out its chips. Earlier this year Groq struck deals with Aramco Digital, a subsidiary of state-owned oil company Saudi Aramco, and Norwegian sustainable energy company Earth Wind & Power, to build out compute capacity and provide access to its chips. Deals between US AI companies and Middle Eastern partners have come under scrutiny from the US government, but Ross said Groq "hasn't found any issues with Aramco. We've worked very closely with the Commerce Department and others."

AI Chip Startup Groq Gets $2.8 Billion Valuation in New Funding Round

Artificial intelligence startup Groq Inc. has raised $640 million in new funding, underscoring investor enthusiasm for innovation in chips for AI systems. The startup designs semiconductors and software to optimize the performance of AI tasks, aiming to help alleviate the huge bottleneck of demand for AI computing power. It was valued at $2.8 billion in the deal, which was led by BlackRock Inc. funds and included backing from the investment arms of Cicsco Systems Inc. and Samsung Electronics Co.

AI chip startup Groq lands $640M to challenge Nvidia | TechCrunch

Groq, a startup developing chips to run generative AI models faster than conventional processors, said on Monday that it's raised $640 million in a new funding round led by Blackrock. Neuberger Berman, Type One Ventures, Cisco, KDDI and Samsung Catalyst Fund also participated. The tranche, which brings Groq's total raised to over $1 billion and values the company at $2.8 billion, is a major win for Groq, which reportedly was originally looking to raise $300 million at a slightly lower ($2.5 billion) valuation. It more than doubles Groq's previous valuation (~$1 billion) in April 2021, when the company raised $300 million in a round led by Tiger Global Management and D1 Capital Partners. Meta chief AI scientist Yann LeCun will serve as a technical advisor to Groq and Stuart Pann, the former head of Intel's foundry business and ex-CIO at HP, will join the startup as chief operating officer, Groq also announced today. LeCun's appointment is a bit unexpected, given Meta's investments in its own AI chips -- but it undoubtedly gives Groq a powerful ally in a cutthroat space. Groq, which emerged from stealth in 2016, is creating what it calls an LPU (language processing unit) inference engine. The company claims its LPUs can run existing generative AI models similar in architecture to OpenAI's ChatGPT and GPT-4o at 10x the speed and on-tenth the energy. Groq CEO Jonathan Ross' claim to fame is helping to invent the tensor processing unit (TPU), Google's custom AI accelerator chip used to train and run models. Ross teamed up with Douglas Wightman, an entrepreneur and former engineer at Google parent company Alphabet's X moonshot lab, to co-found Groq close to a decade ago. Groq provides an LPU-powered developer platform called GroqCloud that offers "open" models like Meta's Llama 3.1 family, Google's Gemma, OpenAI's Whisper and Mistral's Mixtral, as well as an API that allows customers to use its chips in cloud instances. (Groq also hosts a playground for AI-powered chatbots, GroqChat, that it launched late last year.) As of July, GroqCloud had over 356,000 developers; Groq says that a portion of the proceeds from the round will be used to scale capacity and add new models and features. "Many of these developers are at large enterprises," Stuart Pann, Groq's COO, told TechCrunch. "By our estimates, over 75% of the Fortune 100 are represented." As the generative AI boom continues, Groq faces increasing competition from both rival AI chip upstarts and Nvidia, the formidable incumbent in the AI hardware sector. Nvidia controls an estimated 70% to 95% of the market for AI chips used to train and deploy generative AI models, and the firm's taking aggressive steps to maintain its dominance. Nvidia has committed to releasing a new AI chip architecture every year, rather than every other year as was the case historically. And it's reportedly establishing a new business unit focused on designing bespoke chips for cloud computing firms and others, including AI hardware. Beyond Nvidia, Groq competes with Amazon, Google and Microsoft, all of which offer -- or will soon offer -- custom chips for AI workloads in the cloud. Amazon has its Trainium, Inferentia and Graviton processors, available through AWS; Google Cloud customers can use the aforementioned TPUs and, in time, Google's Axion chip; and Microsoft recently launched Azure instances in preview for its Cobalt 100 CPU, with Maia 100 AI Accelerator instances to come in the next several months. Groq could consider Arm, Intel, AMD and a growing number of startups rivals, too, in an AI chip market that could be reach $400 billion in annual sales in the next five years, according to some analysts. Arm and AMD in particular have blossoming AI chip businesses, thanks to soaring capital spending by cloud vendors to meet the capacity demand for generative AI. D-Matrix late last year raised $110 million to commercialize what it's characterizing as a first-of-its-kind inference compute platform. In June, Etched emerged from stealth with $120 million for a processor custom-built to speed up the dominant generative AI model architecture today, the transformer. SoftBank's Masayoshi Son is reportedly looking to raise $100 billion for a chip venture to compete Nvidia. And OpenAI is said to be in talks with investment firms to launch an AI chip-making initiative. To carve out its niche, Groq is investing heavily in enterprise and government outreach. In March, Groq acquired Definitive Intelligence, a Palo Alto-based firm offering a range of business-oriented AI solutions, to form a new business unit called Groq Systems. Within Groq Systems' purview is serving organizations, including U.S. government agencies and sovereign nations, that wish to add Groq's chips to existing data centers or build new data centers using Groq processors. More recently, Groq partnered with Carahsoft, a government IT contractor, to sell its solutions to public sector clients through Carahsoft's reseller partners, and the startup has a letter of intent to install tens of thousands of its LPUs at European firm Earth Wind & Power's Norway datacenter. Groq is also collaborating with Saudi Arabian consulting firm Aramco Digital to install LPUs in future datacenters in the Middle East. At the same time it's establishing customer relationships, Mountain View, California-based Groq is marching toward the next generation of its chip. Last August, the company announced that it would contract with semiconductor firm Global Foundries to manufacture 4nm LPUs, which are expected to deliver performance and efficiency gains over Groq's first-gen 13nm chips. Groq says it plans to deploy over 108,000 LPUs by the end of Q1 2025.

Nvidia competitor Groq raises $640M in new funding

Artificial intelligence startup Groq announced on Monday that it has raised $640M in a Series D funding round as it looks to compete with Nvidia (NASDAQ:NVDA) in the semiconductor space. The new funding, which values the company at $2.8B, includes investors such as BlackRock (BLK), Neuberger Berman, Type One Ventures, Cisco (CSCO) and others. Groq produces language processing units, or LPUs, which it says are faster and more cost-efficient than GPUs for handling AI training needs. "You can't power AI without inference compute," said Jonathan Ross, CEO and Founder of Groq. "We intend to make the resources available so that anyone can create cutting-edge AI products, not just the largest tech companies. This funding will enable us to deploy more than 100,000 additional LPUs into GroqCloud." The company also that former HP (HPQ) and Intel (INTC) executive Stuart Pann is joining the company as its Chief Operating Officer. It also agreed to a deal with Meta (META) AI executive Yann LeCun to be its newest technical advisor. More on Nvidia Nvidia: Bad News For Company Is Good News For Investors (Rating Upgrade) Nvidia: Recent Pullback Presents A Prime Buying Opportunity Nvidia Only Has A Few Key Customers And They're Warning You Nvidia sinks as Citi removes catalyst watch, cuts estimates amid Blackwell delay 'Not a time to panic:' Wedbush pounds table for tech trade amid global sell-off