Nvidia Groq Deal Keeps Fiction Of Competition Alive Analyst Says

Bonisiwe Shabane

-Dec 31, 2025, 2:16 PM

nvidia groq deal keeps fiction of competition alive analyst says

It's been two days since news broke that Nvidia was spending $20 billion to acquire top talent from Groq in what the chip startup called a "non-exclusive licensing agreement." Nvidia, the world's most valuable company, hasn't issued a press release or regulatory filing and, according to a spokesperson, is only confirming the contents of Groq's 90-word blog post published after the close of... "They're so big now that they can do a $20 billion deal on Christmas Eve with no press release and nobody bats an eye," said Stacy Rasgon, an analyst at Bernstein, in a Friday... While neither company confirmed the price tag, CNBC learned from Groq lead investor Alex Davis on Wednesday that Nvidia had agreed to buy assets from Groq, a designer of high-performance artificial intelligence accelerator chips,... Davis' firm, Disruptive, has invested more than half a billion dollars in Groq and led the startup's latest financing round in September at a $6.9 billion valuation. Groq founder and CEO Jonathan Ross along with Sunny Madra, the company's president, and other senior leaders "will join Nvidia to help advance and scale the licensed technology," the startup said in the post,...

Nvidia has struck a sweeping deal with AI chip startup Groq that—depending on which headline you saw first—was either the chip giant’s biggest acquisition ever, or something much more unusual: a “non-exclusive” technology licensing... That distinction isn’t just semantics. It’s the whole story. Groq says it has entered into a non-exclusive licensing agreement for its AI inference technology with Nvidia, and that Groq founder Jonathan Ross and Groq President Sunny Madra, along with additional team members, will... Groq+1 The structure has reignited a broader debate in Silicon Valley and Washington: whether Big Tech is increasingly using licensing, equity stakes, and talent transfers to achieve acquisition-like outcomes—without triggering the same regulatory friction as...

And in this case, at a reported price tag around $20 billion, the stakes are enormous. Reuters+1 Groq’s public statement is explicit about three key points: Nvidia just deployed the playbook that's reshaping how tech giants acquire without acquiring. By structuring a $20 billion Groq deal as a 'non-exclusive licensing agreement' rather than a traditional acquisition, the world's most valuable company is doing something audacious: orchestrating what amounts to a full talent and... It's the latest signal that antitrust enforcement has fundamentally changed how mega-deals get done.

Regulatory pressure is forcing structural innovation, and everyone is watching. Two days after Christmas, Nvidia announced a $20 billion deal that nobody wants to call an acquisition. Groq's founder and CEO Jonathan Ross is leaving for Nvidia. The company's president is going to Nvidia. Senior leaders are following. But according to the official language—a 90-word blog post Groq published after markets closed on Wednesday—this is a "non-exclusive inference technology licensing agreement." The chess move is transparent, and that's precisely the point.

Bernstein analyst Stacy Rasgon put it plainly: "Antitrust would seem to be the primary risk here, though structuring the deal as a non-exclusive license may keep the fiction of competition alive." He's not being... He's describing the actual regulatory arbitrage at work. Nvidia acquired Groq's most valuable asset—the people who built its chips—while technically leaving the company operational under new finance chief Simon Edwards. Call it what it is: the appearance of competition. Call it regulatory theater. This is now a pattern, and patterns are inflection points.

Meta, Google, Microsoft, and Amazon have all deployed variations of this tactic over the past two years. Nvidia itself tested the formula six months ago when it paid over $900 million to hire Enfabrica's CEO Rochan Sankar and other talent while licensing the startup's technology. The result: the startup remained technically independent, Nvidia got the engineering firepower, and the antitrust alarm stays muted compared to a traditional acquisition. The numbers tell the compression story. Groq hit a $6.9 billion valuation in September when Disruptive's Alex Davis led its latest funding round. Fast forward three months, and Nvidia is paying $20 billion for its assets and talent.

That's not a valuation reset. That's desperation pricing—or rather, the cost of moving fast in an environment where traditional M&A is fraught. For context: Nvidia's previous largest deal in 32 years was the 2019 acquisition of Mellanox for close to $7 billion. This deal is nearly three times larger. Copyright The Daily Ledger 2025 | Theme by ThemeinProgress | Proudly powered by WordPress Nvidia founder and CEO Jensen Huang looks on as US President Donald Trump speaks at the US-Saudi Arabia Investment Forum at the John F.

Kennedy Center for the Performing Arts in Washington, DC on November 19, 2025. For two days the news is shared what you do Nvidia was spending $20 billion to acquire top talent from Groq in what the chip startup called a “non-exclusive licensing agreement.” Nvidia, the most valuable company in the world, has not issued a press release or a regulatory file and, according to a spokesman, is only confirming the content of the 90 word of Groq. blog post published after the shortened holiday trade close on Wednesday. “They’re so big now that they can do a $20 billion deal on Christmas Eve without a press release and nobody bats an eye,” Bernstein analyst Stacy Rasgon said in a Friday interview with... CNBC’s MacKenzie Sigalos reports on the Mag7 splitting into AI “earners” and “spenders” — with investors rewarding companies converting capex into profit now, and warning that model convergence could make distribution the next deciding...

CNBC brings you fast, accurate, and actionable business news and market updates. Silver retreated ⁠after touching a record peak above $80 an ounce while gold slipped from levels close to historic ‍highs on Monday ‍as investors booked ‍profits and a market perception of reduced geopolitical risks... Spot gold declined 1.4% at $4,470.56 per ounce, after... Kentucky’s junior U.S. Senator Rand Paul, R-Bowling Green, has introduced the Health Marketplace and Savings Accounts for All Act, to make all Americans eligible for Health Savings Accounts (HSAs). A bombshell came crashing into the White House health narrative Monday when longtime cardiologist Jonathan Reiner publicly rejected the official spin on President Trump’s recent MRI, calling the explanation “laughable” and suggesting the whole...

Nvidia’s decision to acquire Groq’s assets for $20 billion reflects a strategic imperative to bolster its lead in the AI hardware market by securing cutting-edge inference technology and talent. This report explores the multifaceted reasons behind this unprecedented deal, examining Nvidia’s business strategy, Groq’s unique technology, market dynamics, competitive landscape, regulatory context, and the financial calculus involved. The acquisition is structured as a licensing-and-acquihire agreement – effectively transferring all of Groq’s key assets (not the legal entity) to Nvidia while allowing Groq to remain a nominally independent company ([1]) ([2]). This arrangement lets Nvidia circumvent rigorous antitrust scrutiny by maintaining the appearance of competition, even as it absorbs Groq’s intellectual property (IP), key engineers (including founder Jonathan Ross and President Sunny Madra), and architectural... In return, Groq’s investors stand to reap enormous returns on recent funding rounds – indeed, analysts note that the $20B price tag is roughly 2.9× Groq’s $6.9B valuation just three months earlier ([3]) ([4])... Groq, founded in 2016 by ex-Google TPU lead Jonathan Ross, built specialized Language Processing Units (LPUs) for AI inference.

Its chips emphasize a deterministic, single-core design with massive on-chip SRAM, delivering remarkably low-latency inference performance that in independent tests ran roughly 2× faster than any other provider’s solution ([5]). This is in stark contrast to Nvidia’s GPUs, which evolved from graphics processors and rely on many cores plus off-chip HBM memory, introducing overhead and variability. Groq’s architecture achieves up to tens of terabytes-per-second of memory bandwidth via on-chip SRAM and avoids “wasted cycles” through its static scheduling and compiler-driven execution ([6]) ([5]). Such capabilities are critical for future AI applications (especially real-time “ agentic” AI) that demand ultra-fast, low-latency inference. By integrating Groq’s design ideas and team into its “AI Factory” roadmap, Nvidia gains a differentiated architecture against which its GPU-centric stack might otherwise lag. Fierce competition in AI hardware amplifies the urgency of the deal.

Nvidia today dominates the AI accelerator market (approximately 90–95% market share in data-center GPUs ([7]) ([8])), but the rapid growth of AI inference workloads has invited new entrants and custom chips (e.g. Graphcore, Cerebras, AWS Trainium, Google TPU). Analysts project that specialized inference ASICs could capture roughly 45% of the inference market by 2030 ([9]). Groq was one of the leading challengers: its inference cloud had millions of developers (2.0M users, a 5.6× increase over the prior year) ([9]), demonstrating strong momentum. Nvidia likely viewed Groq not merely as a cutting-edge technology provider but as a nascent competitor threatening to nibble at its dominant position. Preemptively acquiring Groq’s assets (rather than risk Groq selling to or partnering with others) both secures the technology and neutralizes an emerging rival.

Regulators are a key concern. Nvidia has faced heightened antitrust scrutiny globally due to its near-monopoly in AI accelerators ([10]) ([11]). Past large deals – notably the 2019 Mellanox acquisition ($6.9B) ([12]) and the attempted purchase of Arm (announced at ~$40B, later blocked) – drew lengthy reviews. Industry observers note that framing the Groq transaction as a license plus key hires allows Nvidia to “have its cake and eat it too”: it functionally acquires Groq’s innovations and team while keeping Groq... Similar strategies have been pursued by other tech giants (e.g. Microsoft’s 2024 licensing of Inflection’s AI assets, which is under regulatory investigation ([13])).

By labeling this a licensing deal, Nvidia sidesteps a protracted antitrust process even as it arguably consolidates its control over AI inference hardware. This report delves into each of these factors in detail. We first provide background on Nvidia and Groq, including relevant financial and technological histories. We then analyze Nvidia’s strategic motivations—technological synergy, market positioning, and competitive threats—highlighting Groq’s architecture and performance advantages. The regulatory and antitrust posture is examined, explaining the deal’s structure as a deliberate response to potential scrutiny. Financial analysis considers the premium paid relative to Groq’s recent funding rounds and Nvidia’s own balance sheet, including implications for investors.

We compare this deal to historical precedents (e.g. Nvidia’s Mellanox buy, AMD’s Xilinx acquisition, Microsoft-Inflection) to derive lessons. Case studies of similar “asset acquisitions” illustrate the risks and outcomes for different stakeholders. Finally, we discuss the broader implications for the AI hardware industry and speculate on future directions: from potential regulatory responses to the impact on innovation and the AI computing ecosystem.

Nvidia Groq Deal Keeps Fiction Of Competition Alive Analyst Says

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