Nvidia has finalized a deal to purchase assets from Groq, a designer of high-performance artificial intelligence accelerator chips, for $20 billion in cash. Alex Davis, CEO of Disruptive, which helped Groq secure its recent financing, reported that the transaction unfolded swiftly. Groq had just raised $750 million at a valuation around $6.9 billion, with investors like Blackrock, Neuberger Berman, and Samsung participating in the funding round.
Groq announced a non-exclusive licensing agreement with Nvidia for its inference technology. Groq’s founder and CEO, Jonathan Ross, as well as president Sunny Madra and other key executives, will transition to Nvidia to advance this technology. Despite the acquisition, Groq will continue to run independently with finance chief Simon Edwards taking the lead as CEO, according to the company’s statement.
Nvidia’s CFO, Colette Kress, chose not to comment on the deal. Davis mentioned that Nvidia is set to acquire all of Groq’s assets, while Groq’s growing cloud business will remain intact. This marks Nvidia’s largest acquisition, surpassing its 2019 buy of Israeli chip designer Mellanox for nearly $7 billion. At the end of October, Nvidia reported having $60.6 billion in cash and short-term investments, significantly up from $13.3 billion in early 2023.
In a message to employees, Nvidia CEO Jensen Huang noted that this agreement would bolster Nvidia’s capacities, aiming to integrate Groq’s low-latency processors into their AI factory framework. While Nvidia is broadening its team and licensing Groq’s intellectual property, they are not acquiring Groq as a complete entity.
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