Groq Valued at $3.5 Billion in Funding Round After Nvidia Deal

Groq Valued at $3.5 Billion in Funding Round After Nvidia Deal Groq has raised $350 million in funding at a $3.5 billion valuation, roughly half what it was worth nearly a year ago before Nvidia Corp. struck a licensing deal with the startup and hired away much of its talent. The financing, set to be announced Monday, was led by Dallas-based investment firm Disruptive. Nvidia is also set to invest in the round, according to a representative for Groq. Nvidia did not respond to a request for comment. Founded in 2016, Groq was among the companies developing their own hardware to rival market leader Nvidia. At its height last September, Groq was valued at $6.9 billion. Months later, Nvidia hired Groq founder and Chief Executive Officer Jonathan Ross and other key employees as part of the licensing deal. Other big tech providers, including Meta Platforms Inc. and Alphabet Inc.’s Google, have also recently scooped up talent from AI startups in unusual licensing arrangements rather than buying the startups outright. Groq has since worked to remake itself as a data center operator, catering to the immense demand for computing resources to run AI software — a process known as inference. It previously announced raising $650 million in June to fund the effort. As part of that financing, Groq reset its valuation but did not disclose the figure at the time. “Inference will without a doubt become the largest and most critical layer of AI infrastructure,” said Alex Davis, Groq’s executive chairman and founder of investment firm Disruptive, in a statement provided to Bloomberg News. “We will be focused on supporting the most important model makers.” The company plans to use some of its recent financing to expand its total data center capacity to more than 200 megawatts by next year.