Nvidia acquires AI chip startup Groq for $20 billion in largest deal ever

Nvidia acquires AI chip challenger Groq for $20B, report says | TechCrunch

Nvidia is buying the AI chip startup Groq for $20 billion, according to a report from CNBC. The purchase is expected to be Nvidia's largest ever, and with Groq on its side, Nvidia is poised to become even more dominant in chip manufacturing. As tech companies compete to grow their AI capabilities, they need computing power, and Nvidia's GPUs have emerged as the industry standard. But Groq has been working on a different type of chip called an LPU (language processing unit), which it has claimed can run LLMs at 10 times faster and using one-tenth the energy. Groq's CEO Jonathan Ross is known for this sort of innovation -- when he worked for Google, he helped invent the TPU (tensor processing unit), a custom AI accelerator chip. In September, Groq raised $750 million at a $6.9 billion valuation. Its growth has been quick and significant -- the company said that it powers the AI apps of more than 2 million developers, up from about 356,000 last year.

Nvidia to buy AI chip startup Groq for $20 billion, CNBC reports

Dec 24 (Reuters) - Nvidia (NVDA.O), opens new tab has agreed to buy Groq, a designer of high-performance artificial intelligence accelerator chips, for $20 billion in cash, CNBC reported on Wednesday. While the acquisition includes all of Groq's assets, its nascent Groq cloud business is not part of the transaction, the report said, citing Alex Davis, CEO of Disruptive, which led the startup's latest financing round. Groq is expected to alert its investors about the deal later in the day, CNBC reported. Nvidia and Groq did not immediately respond to Reuters request for comments. Reporting by Harshita Mary Varghese in Bengaluru; Editing by Shailesh Kuber Our Standards: The Thomson Reuters Trust Principles., opens new tab

Exclusive: Nvidia buying AI chip startup Groq for about $20 billion in its largest acquisition on record

Jonathan Ross, chief executive officer of Groq Inc., during the GenAI Summit in San Francisco, California, US, on Thursday, May 30, 2024. Nvidia has agreed to buy Groq, a designer of high-performance artificial intelligence accelerator chips, for $20 billion in cash, according to Alex Davis, CEO of Disruptive, which led the startup's latest financing round in September. Davis, whose firm has invested more than half a billion dollars in Groq since the company was founded in 2016, said the deal came together quickly. Groq raised $750 million at a valuation of about $6.9 billion three months ago. Investors in the round included Blackrock and Neuberger Berman, as well as Samsung, Cisco, Altimeter and 1789 Capital, where Donald Trump Jr. is a partner. Groq is expected to alert its investors about the deal later on Wednesday. While the acquisition includes all of Groq's assets, its nascent Groq cloud business is not part of the transaction, said Davis. It would mark by far Nvidia's largest deal ever. The chipmaker's biggest acquisition to date came in 2019 with the purchase of Israeli chip designer Mellanox for close to $7 billion. At the end of October, Nvidia had $60.6 billion in cash and short-term investments, up from $13.3 billion in early 2023. Groq has been targeting revenue of $500 million this year amid booming demand for AI accelerator chips used in speeding up the process for large language models to complete inference-related tasks. The company was not pursuing a sale when it was approached by Nvidia. Colette Kress, Nvidia's CFO, declined comment on the transaction. Groq was founded in 2016 by a group of former engineers, including Jonathan Ross, the company's CEO. Ross was one of the creators of Google's tensor processing unit, or TPU, the company's custom chip that's being used by some companies as an alternative to Nvidia's graphics processing units. In its initial filing with the SEC, announcing a $10.3 million fundraising in late 2016, the company listed as principals Ross and Douglas Wightman, an entrepreneur and former engineer at the Google X "moonshot factory." Groq isn't the only chip startup that's gained traction during the AI boom. AI chipmaker Cerebras Systems had planned to go public this year but withdrew its IPO filing in October after announcing that it raised over $1 billion in a fundraising round. In a filing with the SEC, Cerebras said it does not intend to conduct a proposed offering "at this time," but didn't provide a reason. A spokesperson told CNBC at the time that the company still hopes to go public as soon as possible.

Nvidia to acquire Groq for $20 billion in its largest deal ever, CNBC reports By Investing.com

Investing.com -- NVIDIA (NASDAQ:NVDA) has agreed to acquire Groq, a designer of high-performance artificial intelligence accelerator chips, in a $20 billion all-cash deal, CNBC reports. The report, which is citing Alex Davis, chief executive of Disruptive and a long-time backer of the startup, noted that the transaction came together quickly, just months after Groq raised $750 million at a valuation of about $6.9 billion. Disruptive has invested more than $500 million in the company since its founding in 2016. The most recent funding round drew investors including BlackRock, Neuberger Berman, Samsung, Cisco, Altimeter and 1789 Capital. Groq is expected to notify investors about the deal later on Wednesday, Davis said. While the acquisition includes Groq's assets, its early-stage cloud business is excluded from the transaction. The startup was founded by former engineers behind Google's tensor processing unit, or TPU, a chip designed to compete with Nvidia in artificial intelligence workloads. If completed, the deal would represent Nvidia's largest acquisition to date, underscoring the company's push to strengthen its position in advanced AI hardware.

Nvidia to buy AI chip startup Groq for $20 billion, CNBC reports

Dec 24 (Reuters) - Nvidia has agreed to buy Groq, a designer of high-performance artificial intelligence accelerator chips, for $20 billion in cash, CNBC reported on Wednesday. While the acquisition includes all of Groq's assets, its nascent Groq cloud business is not part of the transaction, the report said, citing Alex Davis, CEO of Disruptive, which led the startup's latest financing round. Groq is expected to alert its investors about the deal later in the day, CNBC reported. Nvidia and Groq did not immediately respond to Reuters request for comments. (Reporting by Harshita Mary Varghese in Bengaluru; Editing by Shailesh Kuber)