Making its largest-ever purchase, NVIDIA acquires assets of nine-year-old AI chip startup Groq for about $20 billion.
NVIDIA is purchasing assets from nine-year-old AI chip startup Groq for approximately $20 billion. The deal marks a significant expansion of NVIDIA’s capabilities in high-performance artificial intelligence processing.
Groq, founded in 2016 by former engineers including Jonathan Ross, one of the creators of Google’s tensor processing unit, competes with NVIDIA in AI workloads. The company, valued at $6.9 billion in a financing round in September, framed the transaction as a “non-exclusive licensing agreement,” with its CEO and other senior leaders joining NVIDIA, while Groq will continue operating independently under new CEO Simon Edwards.
NVIDIA CEO Jensen Huang said the acquisition will integrate Groq’s low-latency processors into the company’s AI platform, broadening its scope for inference and real-time workloads. While the company is acquiring Groq’s assets and licensing its intellectual property, the startup itself will remain independent.
The deal surpasses NVIDIA’s previous largest acquisition, the $7 billion purchase of Mellanox in 2019. NVIDIA’s cash reserves, which stood at $60.6 billion at the end of October, have enabled it to invest heavily in AI startups and infrastructure, including recent partnerships with OpenAI, Intel, and CoreWeave.
Groq has been targeting $500 million in revenue this year amid surging demand for AI accelerator chips, which speed up inference tasks for large language models. Investors in Groq’s September financing round included BlackRock, Samsung, Cisco, and Neuberger Berman. The acquisition signals NVIDIA’s intent to strengthen its position in the rapidly growing AI chip market.
