Startup Groq has raised $350 million as it continues to pivot from an AI chipmaker to a neocloud company that provides powerful GPUs and AI infrastructure services.
The new capital, led by investment firm Disruptive with planned participation from Nvidia, values the company at $3.5 billion
That’s down from the $6.9 billion Groq was valued at last September, just a few months before Nvidia hired the startup’s founder and CEO, Jonathan Ross, and other top talent as part of a licensing deal. A spokesperson for the company told TechCrunch that despite the difference in valuation, the company doesn’t see it as a down round, but rather as establishing a new valuation for the “post-Nvidia-lincensing-deal version of Groq.” Groq was focused on building its own chips, dubbed LPUs (language processing units), to compete with Nvidia on inference — the type of compute needed to run AI workloads in real time. After it lost its star team, Groq shifted from being a pure AI chipmaker into a cloud and data center provider that operates Nvidia systems, making the remaining Groq company an Nvidia customer.
In June, Groq raised a $650 million round to kick off its pivot. The company intends to scale from 54 megawatts to more than 200 megawatts by 2027. Today, Groq operates 13 data centers across North America, Europe, the Middle East, and Asia Pacific, serving more than 6 million developers, enterprises, and AI-native companies.