AI Chip Startup Groq Seeks $500M Funding at $6B Valuation to Fulfill Saudi Deal

AI chip startup Groq discusses $6 billion valuation, The Information reports

July 9 (Reuters) - U.S. semiconductor startup Groq has spoken to investors about raising between $300 million and $500 million at a $6 billion post-investment valuation, The Information reported on Wednesday, citing people with knowledge of the matter. The company is seeking the cash to fulfill a recently inked deal with Saudi Arabia, the report said. In February, Groq secured a $1.5 billion commitment from Saudi Arabia to expand the delivery of its advanced artificial intelligence chips to the country. Groq has told investors that the contracts in Saudi Arabia will help the company bring in about $500 million in revenue this year, the report added. Groq did not immediately respond to a Reuters request for comment. In August last year, Groq raised $640 million in a Series D funding round led by Cisco Investments, Samsung Catalyst Fund and BlackRock Private Equity Partners, among others, which brought its valuation to $2.8 billion. The Silicon Valley firm is known for producing AI inference chips that optimize speed and execute commands of pre-trained models. Reporting by Rishabh Jaiswal in Bengaluru; Editing by Shailesh Kuber Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Groq eyes $6 billion valuation after $1.5 billion Saudi AI chip deal

Groq, a US-based AI chip maker, plans to secure funding. The company aims to raise between $300 million and $500 million. This funding supports a significant agreement with Saudi Arabia. The deal involves delivering AI chips. If successful, Groq's valuation could reach $6 billion. Saudi Arabia previously committed $1.5 billion to Groq. This investment will help Groq meet its obligations. Groq is a U.S. semiconductor startup that makes special AI chips used for running AI tasks very fast. The company is talking to investors to raise $300 million to $500 million. If this works out, Groq's valuation would go up to $6 billion after the investment. The money is needed to deliver on a deal with Saudi Arabia that was signed recently. Back in February 2024, Saudi Arabia promised $1.5 billion to help Groq deliver more of its AI chips to them, according to the report by Reuters. ALSO READ: Trump Sanctions UN Expert Francesca Albanese Over Gaza, Israel Criticism and ICC Support Groq told investors that its Saudi contracts could make them $500 million in revenue this year. In August 2023, Groq raised $640 million in a big funding round. That round was led by Cisco Investments, Samsung Catalyst Fund, and BlackRock Private Equity Partners, and Groq's valuation became $2.8 billion at that time, as stated in the reports. ALSO READ: Amazon Prime Day 2025 sales drop 41% on day 1 despite 4-day event - shoppers wait for better deals Groq is based in Silicon Valley and is known for making AI inference chips -- chips that are really good at running pre-trained AI models super fast. Groq didn't reply when Reuters asked for a comment, as mentioned in the report by Reuters. Q1. Why is Groq raising more money now? To fund its new $1.5 billion AI chip deal with Saudi Arabia. Q2. How much is Groq worth after new investment? Groq may be valued at $6 billion post-investment.

Nvidia Rival Groq Reportedly Eyes $6 Billion Valuation, Cisco And Samsung-Backed Company Looks To Double Valuation Amid Surging AI Chip Demand - NVIDIA (NASDAQ:NVDA)

On Wednesday, Nvidia Corporation NVDA briefly hit $4 trillion market cap. Meanwhile, its rival Silicon Valley startup Groq is reportedly aiming to raise fresh capital at a $6 billion valuation to fulfill a major Saudi contract. What Happened: Groq has spoken to investors about raising between $300 million and $500 million to support its expansion efforts, particularly tied to a $1.5 billion agreement with Saudi Arabia to deliver advanced AI inference chips, reported Reuters (via The Information). The startup told potential investors it expects to generate around $500 million in revenue this year from its contracts in the Gulf nation. Read Also: Humble Beginnings: Like NVIDIA, Reddit Was Founded Inside A Restaurant Groq's chips are designed to process and execute commands of pre-trained AI models with high speed and efficiency -- a direct challenge to Nvidia. Why It's Important: In May, it was reported that Saudi Arabia's sovereign wealth fund-backed AI firm, HUMAIN, has chosen Groq to handle its inference operations. HUMAIN, backed by Saudi Arabia's Public Investment Fund and chaired by Crown Prince Mohammed bin Salman, was created to unify the nation's AI investments into one company offering AI services, data centers, cloud solutions and an Arabic large language model. In its last funding round in August 2023, Groq raised $640 million at a $2.8 billion valuation from investors including Cisco Investments, Samsung Catalyst Fund and BlackRock Private Equity Partners. Earlier this month, Groq opened its first European data center in Helsinki, Finland, to support its global expansion and meet growing AI demand in Europe. Photo Courtesy: YAKOBCHUK V on Shutterstock.com Read Next: Charlie Munger Said Getting Rich Is Harder Than Ever, But Here's 'The Beauty Of It' -- You Only Have To Do It Once Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. NVDANVIDIA Corp$163.362.10%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum76.28Growth98.59QualityN/AValue6.94Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs