Nvidia Licenses Core Groq Technology in Its Most Ambitious AI Move Yet

Nvidia has made its biggest move yet in the fast-growing artificial intelligence industry by acquiring key assets from AI chip startup Groq in a deal valued at about $20 billion. This transaction is the largest deal Nvidia has ever done and shows how serious the company is about staying ahead in the global AI race. 

Groq is a young but highly respected chip company founded in 2016 by former Google engineers. One of its founders, Jonathan Ross, helped create Google’s Tensor Processing Unit, a chip designed to compete with Nvidia’s graphics processors in handling AI tasks. 

Groq became well known for building AI accelerator chips that focus on ultra-fast response times, especially for inference. Inference is the stage where AI models use what they have learned to produce answers, predictions, or actions in real time. 

Although the deal is valued at $20 billion, Nvidia is not buying Groq as a full company. Instead, the agreement is structured as a non-exclusive licensing deal. Nvidia is acquiring Groq’s core assets and licensing its inference technology, while Groq will continue operating as an independent company. Groq’s cloud business, GroqCloud, is not part of the transaction and will keep running without disruption. 

As part of the agreement, several senior Groq leaders, including founder and CEO Jonathan Ross and company president Sunny Madra, will join Nvidia. Groq will now be led by its finance chief, Simon Edwards, who takes over as CEO. 

Jensen Huang, the chief executive of Nvidia, explained that the goal is to integrate Groq’s low-latency processors into the architecture of Nvidia’s factory. This will allow Nvidia to better serve real-time AI workloads across industries such as robotics, data centers, finance, and autonomous systems. 

The timing of the deal surprised many observers. Just three months earlier, Groq raised $750 million at a valuation of $6.9 billion from major investors including BlackRock, Samsung, Cisco, and others. According to investors, Groq was not actively looking to be sold when Nvidia approached it, which highlights Nvidia’s strong interest in Groq’s technology and talent. 

This acquisition fits into a broader trend in the tech industry. Instead of traditional takeovers, major companies like Nvidia, Google, Meta and Microsoft are increasingly using licensing deals and talent transfers to secure top AI expertise. Nvidia has already done similar deals with other AI hardware startups and continues to invest heavily across the AI ecosystem. 

With more than $60 billion in cash on hand, Nvidia has the financial power to shape the future of AI hardware. By bringing Groq’s technology and engineers into its orbit, Nvidia strengthens its dominance in AI chips and signals that competition in this space is only going to intensify. 

As the tech industry goes into overdrive to bring to market more advanced products, analysts will be closely watching many firms, such as D-Wave Quantum Inc. (NYSE: QBTS), that are making significant progress in other verticals of the tech space that could transform most industries. 

NOTE TO INVESTORS: The latest news and updates relating to D-Wave Quantum Inc. (NYSE: QBTS) are available in the company’s newsroom at https://ibn.fm/QBTS 

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