Nvidia Invests 20 Billion In Groq To Expand Ai Inference Capabilities

Nvidia has agreed to buy assets from 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... 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 said in a blog post Wednesday that it's "entered into a non-exclusive licensing agreement with Nvidia for Groq's inference technology," without disclosing a price.

With the deal, 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 post said. Groq added that it will continue as an "independent company," led by finance chief Simon Edwards as CEO. Colette Kress, Nvidia's CFO, declined comment on the transaction. Get the tools you need to succeed in the market, with real-time data, news and analysis from MarketSpy Nvidia has agreed to acquire key assets from AI chip startup Groq in a transaction valued at approximately $20 billion, marking the largest deal in the company’s history and underscoring its determination to dominate... While the structure stops short of a full corporate acquisition, the scale, strategic importance, and talent transfer make it one of the most consequential AI hardware deals to date.

The agreement centers on Groq’s inference technology and intellectual property, along with the integration of its senior leadership into Nvidia. Groq, founded by engineers behind Google’s Tensor Processing Unit, has been viewed as one of the most credible challengers to Nvidia’s dominance in AI acceleration. At roughly $20 billion in cash, the deal dwarfs Nvidia’s previous largest acquisition, the nearly $7 billion purchase of Mellanox in 2019. The size of the transaction reflects both Nvidia’s immense financial firepower and the premium now placed on advanced AI hardware technologies. As of late October, Nvidia held $60.6 billion in cash and short-term investments, up sharply from $13.3 billion in early 2023, giving it ample flexibility to pursue large strategic moves. This Groq transaction represents a significant deployment of that capital toward securing long-term leadership in AI infrastructure.

Get the latest updates delivered to your inbox every day, and stay up-to-date for free 🧠📈 Get the latest updates delivered to your inbox every day, and stay up-to-date for free 🧠📈 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 buys AI chip startup Groq's assets for $20 billion in the company's biggest deal ever -- Transaction includes acquihires of key Groq employees, including CEO AI training kingpin Nvidia has cut a control-through-deconstruction deal to grow its influence in the inference realm by snapping up one of its most credible challengers in inference accelerator chips just before Christmas Eve.

According to a CNBC report, Nvidia spent $20 billion, one-third of its $60 billion cash pile, to acquire inference technology assets, including CEO Jonathan Ross, President Sunny Madra, and other members of Groq’s core... Groq CFO Simon Edwards will step into the CEO role of the remaining company, mainly comprising Groq’s nascent cloud business, which sells access to the company’s AI accelerators through cloud APIs. It will prevent Nvidia from directly competing with its hyperscale customers; so, Nvidia captured the brain and the silicon without engaging in a cloud fight. Though it’s Nvidia’s largest deal so far, it embodies a new type of dealmaking in the tech world that leaves some assets and employees behind instead of making an outright acquisition. That leaves behind a legal shell, helping companies evade antitrust scrutiny. In September 2025, Nvidia orchestrated a similar but smaller deal when it shelled out over $900 million to license Enfabrica’s technology and to hire CEO Rochan Sankar and other employees from the AI hardware...

While Nvidia CFO Colette Kress declined to comment on the deal, Groq issued a statement following the CNBC report, acknowledging that it has entered into a non-exclusive licensing agreement with Nvidia for Groq’s inference... But the real scoop came from Jensen Huang’s email sent to Nvidia employees, which CNBC obtained. He said that the agreement will expand Nvidia’s capabilities. SANTA CLARA, California, December 24, 2025 – Nvidia has reached an agreement to license technology from AI inference startup Groq and hire key executives, including founder Jonathan Ross, in a transaction valued at approximately... The deal, described by Groq as a non-exclusive licensing arrangement for its inference technology, will see Ross, President Sunny Madra, and other senior leaders join Nvidia to scale the licensed IP. Groq will continue operating independently, with finance chief Simon Edwards stepping in as CEO, and its GroqCloud service remaining uninterrupted.

Groq’s Language Processing Units (LPUs) specialize in low-latency inference, claiming up to 10 times faster execution and one-tenth the energy use compared to traditional GPUs for running pre-trained AI models. The startup, founded in 2016 by former Google engineers who developed the Tensor Processing Unit, raised $750 million in September at a $6.9 billion valuation. Nvidia CEO Jensen Huang stated the partnership would “extend our platform to serve a broad range of AI inference and real-time workloads.” Nvidia declined to comment on financial terms, while Groq emphasized continuity for... The transaction represents Nvidia’s largest to date, surpassing its $6.9 billion Mellanox acquisition in 2019. It follows similar talent-and-IP deals, such as Nvidia’s $900 million arrangement with Enfabrica earlier this year. In a move that has sent shockwaves through Silicon Valley and global financial markets, NVIDIA (NASDAQ: NVDA) confirmed on December 24, 2025, a landmark $20 billion non-exclusive licensing agreement and strategic "acqui-hire" involving the...

The deal, finalized just as the market closed for the holiday break, represents the most significant consolidation of AI hardware power since the dawn of the generative AI era, effectively merging Nvidia’s dominant GPU... The immediate implications are profound: Nvidia has successfully neutralized its most credible architectural threat while simultaneously securing the talent of Groq’s founder, Jonathan Ross—a co-creator of the Google TPU. By opting for a massive licensing deal and "acqui-hire" rather than a full merger, Nvidia appears to be navigating a sophisticated regulatory path designed to circumvent the antitrust hurdles that famously derailed its acquisition... For the market, this signals that the "Inference War"—the battle to run AI models at human-like speeds—has entered a new, more consolidated phase. The deal confirmed this week is the culmination of a frantic 12-month period for Groq. Throughout 2025, the startup saw its valuation soar, fueled by a $750 million funding round in September led by Disruptive and supported by heavyweights like BlackRock (NYSE: BLK) and Neuberger Berman, which valued the...

Earlier in February 2025, Groq had secured a staggering $1.5 billion commitment from the Kingdom of Saudi Arabia to build a massive LPU-based data center in Dammam. This rapid scaling made Groq an unavoidable target for Nvidia, which was looking to bolster its position as AI revenue shifted from training models to running them—a transition that officially reached a tipping point... Under the terms of the agreement, Nvidia will pay $20 billion for a perpetual, non-exclusive license to Groq’s core IP, specifically its deterministic SRAM-based architecture. Jonathan Ross and his senior engineering team will join Nvidia to lead a new "Real-Time Inference" division. Crucially, Groq will remain an independent entity for its cloud services business, GroqCloud, which will continue to operate under new CEO Simon Edwards. This "split" structure is a tactical masterstroke, allowing Nvidia to integrate the technology into its next-generation "AI Factory" architecture while leaving the service-level competition theoretically open to satisfy regulators.

The industry reaction has been one of awe and caution. Analysts noted that while Nvidia’s Blackwell B200 chips remain the gold standard for high-throughput and massive model density, Groq’s LPUs have consistently outperformed GPUs in "time-to-first-token" latency. By bringing this technology in-house, Nvidia CEO Jensen Huang is effectively closing the gap in real-time human-AI interaction, where Groq’s 500–750 tokens-per-second performance had begun to lure away high-frequency trading and real-time translation customers.

People Also Search

• Nvidia buying AI chip startup Groq for about $20 billion ... - CNBC
• Nvidia signs $20 billion deal with Groq for AI tech
• Nvidia Strikes $20 Billion Groq Asset Deal in Its Biggest Bet Yet on AI ...
• Nvidia Secures AI Inference Power in $20 Billion Groq Licensing Deal
• Nvidia Invests $20 Billion in Groq to Expand AI Inference Capabilities
• Nvidia Groq $20 Billion Deal: AI Chip Acquisition
• Groq: Nvidia's $20 Billion Bet on AI Inference - EE Times
• Nvidia NVDA unveils $20B Groq deal to speed AI inference
• Nvidia Acquires AI Inference Startup Groq in $20 Billion Deal
• The Inference War: Nvidia's $20 Billion Strategic Strike on Groq ...