Nvidia Strikes Landmark Deal With AI Startup

Nvidia acquires assets of Groq in a high-profile acquisition deal to enhance AI inference and chip development.

Chipmaker Nvidia will take over assets of AI chip startup Groq due to an estimated cash transaction of 20 billion dollars, the biggest transaction in Nvidia history. The relocation highlights how Nvidia has been strategizing to refreeze its market standing in terms of AI hardware but selectively incorporating the latest startup technology.

The acquisition unites the low-latency protocol inference processors and engineering skill of Groq into the employ of Nvidia. The Groq founder and CEO Jonathan Ross, who worked on TPU at Google, will come to Nvidia together with other top managers. The Groq cloud platform, GroqCloud, will still be under new management and maintain the commercial presence of the startup.

The valuation of Groq during the transaction is close to triple the valuation of the company the last time it was funded, indicating substantial investor confidence in its SRAM-based chip architecture. The method also does not access high-bandwidth memory, allowing faster AI inference and solving the supply challenges to the worldwide chip market. Competitor Cerebras Systems is also planning an announcement along more or less the same strategy and has indicated a potential IPO.

Nvidia CEO Jensen Huang stated in an internal memo that the company will design Groq processors into its AI factory architecture, which will increase real-time inference with no purchase of Groq as a company.

The deal follows growing competition in the market, where tech giants and semiconductor competitors spend massive sums of money on proprietary AI chips, accelerating the merger and acquisition of the start-ups and AI hardware market.