Nvidia just made the biggest acquisition in its history. The chipmaker is buying assets from Groq, a nine-year-old AI startup that designs blazing-fast inference chips, for $20 billion in cash. The deal signals how aggressive the race for AI computing dominance has become—especially as Nvidia flexes its enormous cash pile to lock down emerging chip talent before competitors can grab it.
Nvidia has agreed to buy assets from Groq, a designer of high-performance AI accelerator chips, for $20 billion in cash, according to Alex Davis, CEO of Disruptive, which led Groq's latest funding round in September. The deal came together quickly, Davis said, despite Groq not actively seeking a buyer.
Just three months before Nvidia's offer, Groq had closed a $750 million funding round that valued the company at about $6.9 billion. That round included heavyweights like Blackrock, Neuberger Berman, Samsung, Cisco, and Altimeter, along with 1789 Capital, where Donald Trump Jr. sits as a partner. The speed at which the valuation nearly tripled underscores how white-hot the demand for specialized AI chips has become.
Groq confirmed the arrangement in a blog post on Wednesday, saying it's "entered into a non-exclusive licensing agreement with Nvidia for Groq's inference technology." The deal includes a significant shift in leadership: Groq founder and CEO Jonathan Ross, along with President Sunny Madra and other senior leaders, will join Nvidia to help advance and scale the licensed technology. Meanwhile, Groq's cloud business will continue operating independently, now under the leadership of finance chief Simon Edwards as the new CEO.
Nvidia CFO Colette Kress declined to comment on specifics, but the company's CEO Jensen Huang sent an email to employees that was obtained by CNBC. "We plan to integrate Groq's low-latency processors into the NVIDIA AI factory architecture, extending the platform to serve an even broader range of AI inference and real-time workloads," Huang wrote. He emphasized that while Nvidia is "adding talented employees to our ranks and licensing Groq's IP, we are not acquiring as a company." It's a distinction that matters— maintains its status as an independent operation, just minus most of its core assets and leadership.
