Nvidia has struck a massive non-exclusive licensing agreement with AI chip startup Groq, reportedly valued at around $20 billion. The deal sees Groq’s founder, president, and key team members heading to Nvidia, while Groq insists it remains independent.
This agreement cements Nvidia’s already formidable position in the AI chip market, allowing it to fold Groq’s speedy inference technology into its arsenal without a full takeover. Rivals might feel a slight chill, knowing the leader just added another arrow to its quiver.
Meanwhile, Groq’s investors are likely toasting a handsome return, as the startup—valued at $6.9 billion just months ago—sees its tech scaled globally under Nvidia’s vast resources. Customers of GroqCloud can breathe easy, with services promised to continue uninterrupted.
Nvidia announced the deal quietly, but the numbers speak volumes. CEO Jensen Huang noted plans to integrate Groq’s low-latency processors into Nvidia’s AI factory architecture, broadening support for real-time AI workloads.
Groq, founded in 2016 by former Google engineers including Jonathan Ross—who helped create the Tensor Processing Unit—specializes in inference chips known as LPUs. These promise faster, more efficient responses for AI models once they’re trained.
The agreement came together swiftly, sources say. Groq had raised hundreds of millions, attracting big names like BlackRock and Samsung.
Yet here they are, licensing their core tech non-exclusively to the very giant many saw as a competitor. Ross, along with president Sunny Madra and others, will now help Nvidia advance the technology. Groq emphasized continuity in its blog post. Simon Edwards, previously the finance chief, steps up as CEO.
GroqCloud, the platform offering access to their hardware, stays operational. No disruptions expected. This structure mirrors recent Big Tech maneuvers—licensing tech and hiring talent without outright acquisitions, neatly sidestepping some regulatory hurdles.
Nvidia’s timing aligns with its stellar performance. The company posted $57 billion in revenue for its third quarter of fiscal 2026, beating expectations handily. Huang previously declared Blackwell chip sales “off the charts,” with cloud GPUs sold out. The fourth quarter looks even brighter.
For Nvidia, adding Groq’s inference prowess extends its lead as AI shifts from training massive models to deploying them efficiently. Groq’s remaining team carries on independently, perhaps eyeing new horizons. The deal highlights how quickly fortunes shift in AI hardware.
One day a plucky challenger, the next contributing to the empire’s next generation. Silicon Valley’s version of a peaceful merger.
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