Groq targets $650 million fundraise after pivoting to AI inferencing with Nvidia deal

Groq targets $650 million fundraise after Nvidia licensing deal: Report

Groq is seeking $650 million from its investors. This comes after a significant $17 billion licensing deal with Nvidia. Groq is now concentrating on AI inferencing. Investors are set to receive payouts from the Nvidia deal. They will then have the chance to invest in Groq's new phase. This move signals a strategic shift for the AI chip startup. Groq is raising up to $650 million from existing investors, Axios reported on Thursday, after the AI chip startup signed a $17 billion licensing deal with Nvidia in December. Groq has been ⁠shifting focus ⁠away from hardware toward AI inferencing, where it specialises in enabling trained AI models to respond to user requests. The startup's investors have already received payouts, with a final cash distribution ⁠expected soon through the Nvidia deal, Axios reported. Investors are now being ⁠asked to participate in Groq 2.0, with existing backers Disruptive and Infinitum backstopping the $650 million raise if it is not fully subscribed, the report said. Existing shareholders will receive the remaining cash distributions and then have the opportunity to invest in a new company, Axios reported. Groq did not ⁠immediately respond to Reuters' request for comment. Nvidia is preparing a version of its Groq AI chips that can be sold to the Chinese market, two sources familiar with the matter told Reuters in March.

Groq Seeks $650 Million Amid Shift to AI Inference Neocloud Business | PYMNTS.com

This move follows a $20 billion licensing deal with Nvidia that was announced in December and saw much of Groq's senior team leave the company, according to the report. With its current effort, Groq is offering its existing shareholders the opportunity to invest in "Groq 2.0," the report said. Groq did not immediately reply to PYMNTS' request for comment. In the deal announced in December, Nvidia acquired talent and tech from Groq, with Groq Founder Jonathan Ross, Groq President Sunny Madra and other members of the Groq team joining Nvidia. An Nvidia spokesperson told PYMNTS at the time: "We haven't acquired Groq. We've taken a non-exclusive license to Groq's IP and have hired engineering talent from Groq's team to join us in our mission to provide world-leading accelerate computing technology." Groq said at the time that with the agreement, the companies aimed to expand access to high-performance, low-cost inference. "Groq will continue to operate as an independent company with [Groq Chief Financial Officer] Simon Edwards stepping into the role of Chief Executive Officer," the company said in a Dec. 24 blog post. "GroqCloud will continue to operate without interruption." Three months earlier, in September, Groq said that it was valued at $6.9 billion in a funding round in which it raised $750 million in new financing. Groq said at the time that its compute powered more than 2 million developers and Fortune 500 companies and that it was growing its global presence and playing a central role in the global deployment of AI technology that originated in America. The valuation Groq achieved in September was more than double the one it gained about a year earlier. In August 2024, the company was valued at $2.8 billion in a funding round in which it secured $640 million. More recently, in February, Groq said GroqCloud adoption continues to support the company's planned infrastructure expansion. The company saw a record number of developers, more than 3.5 million, using GroqCloud.

Groq raises up to $650 million from existing investors - Reuters By Investing.com

Investing.com - Groq is raising up to $650 million from existing investors, Reuters reported Thursday, citing a source familiar with the matter, after the AI chip startup signed a $17 billion licensing deal with Nvidia (NASDAQ:NVDA) in December. Groq has been shifting focus away from hardware toward AI inferencing, where it specializes in enabling trained AI models to respond to user requests. The startup's investors have already received payouts, with a final cash distribution expected soon through the Nvidia deal, according to the source. Existing shareholders will receive the remaining cash distributions and then have the opportunity to invest in a new company, as per the source. Investors are now being asked to participate in Groq 2.0, with existing backers Disruptive and Infinitum backstopping the $650 million raise if it is not fully subscribed, the source said. Nvidia is preparing a version of its Groq AI chips that can be sold to the Chinese market, Reuters reported in March. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Groq raising up to $650 million from existing investors, source says

May 28 (Reuters) - Groq is raising up to $650 million from existing investors, a source familiar with the matter told Reuters on Thursday, after the AI chip startup signed a $17 billion licensing deal with Nvidia in December. Groq has been shifting focus away from hardware toward AI inferencing, where it specializes in enabling trained AI models to respond to user requests. o The startup's investors have already received payouts, with a final cash distribution expected soon through the Nvidia deal, according to the source. o Investors are now being asked to participate in Groq 2.0, with existing backers Disruptive and Infinitum backstopping the $650 million raise if it is not fully subscribed, the source said. o Existing shareholders will receive the remaining cash distributions and then have the opportunity to invest in a new company, as per the source. o Axios reported the news first earlier in the day. o Nvidia is preparing a version of its Groq AI chips that can be sold to the Chinese market, two sources familiar with the matter told Reuters in March. (Reporting by Anhata Rooprai in Bengaluru; Editing by Jonathan Ananda and Shreya Biswas)