Nvidia S 20b Groq Bet Fuels Bold Analyst Targets Msn

Bonisiwe Shabane

-Dec 31, 2025, 2:15 PM

nvidia s 20b groq bet fuels bold analyst targets msn

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. 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.

Shares climb as NVIDIA secures non-exclusive license and key talent from the AI chip startup to dominate the fast-growing inference market. NVIDIA Corp. (NASDAQ: NVDA) has entered into a landmark $20 billion non-exclusive licensing agreement for the technology and talent of AI chip startup Groq, a move that solidifies its dominance in the artificial intelligence sector and... The deal, NVIDIA’s largest financial commitment to date, sent shares higher as investors and analysts digested the implications of the massive investment. Under the terms of the agreement, NVIDIA will license Groq’s cutting-edge AI inference technology and integrate its low-latency processors into the company's AI platforms. In a maneuver widely seen as an “acquihire,” the deal also brings Groq's visionary founder, Jonathan Ross, and other key personnel into NVIDIA's fold to spearhead the new initiative.

Despite the scale of the deal and the transfer of its leadership, Groq will reportedly maintain its operational independence, with its GroqCloud business continuing as a separate entity. The strategic rationale behind the deal lies in the evolving landscape of artificial intelligence. While NVIDIA’s powerful GPUs have become the industry standard for AI training—the process of teaching models on vast datasets—the industry is rapidly shifting focus to AI inference, the application of trained models to make... Groq, founded by former Google engineers who developed the Tensor Processing Unit (TPU), specializes in this area with its proprietary Language Processing Units (LPUs). These chips are designed specifically for high-speed, low-latency inference, a critical requirement for applications like chatbots, real-time language translation, and autonomous systems. This deal gives NVIDIA access to a best-in-class architecture purpose-built for this next phase of AI deployment.

Wall Street reacted positively to the strategic move, with NVIDIA stock trading at $188.61 in Wednesday's session. The deal drew immediate commentary from analysts, with Bank of America’s Vivek Arya reiterating a “Buy” rating and calling NVIDIA a “top sector pick.” Arya noted the deal's strategic importance was comparable to the... Nvidia will license Groq's ultra-low-latency inference technology and hire key executives including CEO Jonathan Ross in a deal that signals the AI chip race is shifting. Nvidia just made the biggest bet in its history—and it's not on GPUs. On Christmas Eve, the chipmaker announced a $20 billion deal with Groq, the AI inference startup known for its ultra-fast Language Processing Units (LPUs). The transaction includes a non-exclusive licensing agreement for Groq's inference technology and the acqui-hire of key executives, including founder and CEO Jonathan Ross.

It's Nvidia's largest deal ever, nearly tripling its previous record: the $7 billion Mellanox acquisition in 2019. Groq's technology solves a problem Nvidia's GPUs weren't designed for. On December 24, 2025, NVIDIA stunned the semiconductor industry with a $20 billion deal involving AI chip startup Groq—its largest transaction in three decades and nearly triple the size of its landmark Mellanox acquisition... Crucially, this is not a conventional acquisition. Instead, NVIDIA executed a sophisticated acqui-hire plus technology licensing arrangement: Groq remains legally independent, but its core leadership team and its ultra–low-latency inference technology are folded directly into NVIDIA’s rapidly expanding AI Factory architecture. At the center of the deal is Jonathan Ross, Groq founder and former lead architect of Google’s first-generation TPU.

Rather than absorbing Groq outright, NVIDIA opted for a hybrid structure combining non-exclusive IP licensing with deep talent integration. This approach delivers two immediate advantages: Nvidia has agreed to its biggest deal on record, acquiring rival chipmaker Groq's inference technology assets for $20 billion, per a CNBC report. Groq founder and CEO Jonathan Ross, as well as other company leaders, will join Nvidia to scale up the tech. In a blog post, Groq described the deal as a "non-exclusive licensing agreement" with Nvidia, and added that Groq will continue operating separately under CFO-turned-CEO Simon Edwards. In an email to staff obtained by CNBC, Nvidia CEO Jensen Huang said the deal will expand its real-time capabilities.

Today Groq entered into a non-exclusive licensing agreement with Nvidia for Groq’s inference technology. Along with other members of the Groq team, I’ll be joining Nvidia to help integrate the licensed technology. GroqCloud will continue to operate without interruption. Learn more here: https://lnkd.in/gMDW8QEG Nvidia is not acquiring its competitor, Groq. Antitrust makes AI deals complicated, so let me explain.

CNBC reported yesterday that Nvidia is acquiring AI inference chip startup Groq for about $20 billion. Groq then confirmed there is an agreement with Nvidia (https://lnkd.in/gkFFQCpP), but that it's a licensing deal, not an acquisition: “As part of this agreement, Jonathan Ross, Groq’s Founder, Sunny Madra, Groq’s President, and other... Groq will continue to operate as an independent company with Simon Edwards stepping into the role of Chief Executive Officer.” In other words, Nvidia is getting Groq’s tech and some of its key employees,... Nvidia CEO Jensen Huang confirmed the deal in an email to his employees, saying: “We plan to integrate Groq’s low-latency processors into the Nvidia AI factory architecture, extending the platform to serve an even... Antitrust regulators haven't been able to keep up with Big Tech's deals for decades, and in the AI era, everything moves even faster. Chamath Palihapitiya turned a single deep-tech bet on AI chip startup Groq into a generational VC outcome, and NVIDIA just wrote the $20B check that proves it.

In 2017, while most investors were still debating ICOs and “AI tokens,” Chamath quietly wired $10M into a tiny custom AI chip startup called Groq at a ~$30M valuation. That one check bought roughly 33% of the company. Then Social Capital doubled down with a $52.3M convertible note in 2018, bringing total exposure to $62.3M. ▪️The numbers that matter Groq went on to raise $300M at a $1.1B valuation in 2021, $640M at $2.8B in 2024, and $750M at $6.9B in September 2025. Along the way, early stakes were diluted, but with board seats and likely pro‑rata, Social Capital still ends up around an estimated 15–20% ownership. At a ~$20B Nvidia takeout price, that’s roughly $3B–$4B in value on a $62.3M cost basis – a 50–65x return in about 8 years.

For context, this single position is now worth more than Social Capital’s entire 2015 fund size of $1.1B. One deal. Eight years. 50x. ▪️The timing flex Chamath made the original bet on custom AI inference chips in 2017 – long before ChatGPT or “inference bottlenecks” were mainstream talking points. He sat on Groq’s board through the hard zero‑to‑one phase and stepped back around 2021, right as the company shifted into scale mode.

Fast‑forward: Nvidia is now paying ~$20B in cash because it needs Groq’s LPU architecture to win inference at scale and lock in its ecosystem. Jensen Huang is effectively cutting a multi‑billion‑dollar check to reward one of the earliest conviction bets on the inference problem. ▪️The lesson for founders & LPs Say whatever you want about SPACs or messy public market experiments – a single deep, non-consensus, technically right bet like Groq more than covers a lot of scars. This is what venture is supposed to look like: concentrated conviction, brutal patience, and the willingness to be lonely on a thesis for years. Curious: in the AI x crypto x infra cycle we’re living through now, what’s the Groq-style non-consensus bet you’d be proud to hold through an 8‑year volatility storm?👇 Seeing deals like Groq's $20B exit... 🚀 If you're hunting access to high-conviction deals like in xAI, Anthropic, Perplexity, Figure, Kraken & similar – DM me.

Specializing in private equity secondaries for sophisticated LPs. Deal structure is currently unclear but key motives behind the ~$20Bn Nvidia/Groq deal, my hot-take: A) Access high-performance AI inference tech to extend Nvidia’s chip ecosystem (Groq makes highly-specialized chips called Language Processing Units...

Nvidia S 20b Groq Bet Fuels Bold Analyst Targets Msn

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