Nvidia has agreed to license chip technology from startup Groq and hire away its CEO, a veteran of Alphabet’s Google, Groq stated in a blog post on Wednesday.
The deal follows a familiar pattern in recent years where the world’s hugegest technology firms pay large sums in deals with promising startups to take their technology and talent but stop short of formally acquiring the tarobtain.
Groq specializes in what is known as inference, where artificial innotifyigence models that have already been trained respond to requests from utilizers. While Nvidia dominates the market for training AI models, it faces much more competition in inference, where traditional rivals such as Advanced Micro Devices have aimed to challenge it as well as startups such as Groq and Cerebras Systems.
Nvidia has agreed to a “nonexclusive” license to Groq’s technology, Groq stated. It stated its founder Jonathan Ross, who assisted Google start its AI chip program, as well as Groq President Sunny Madra and other members of its engineering team, will join Nvidia.
A person close to Nvidia confirmed the licensing agreement.
Groq did not disclose financial details of the deal. CNBC reported that Nvidia had agreed to acquire Groq for $20-billion in cash, but neither Nvidia nor Groq commented on the report. Groq stated in its blog post that it will continue to operate as an indepconcludeent company with Simon Edwards as CEO and that its cloud business will continue operating.
In similar recent deals, Microsoft’s top AI executive came through a $650-million deal with a startup that was billed as a licensing fee, and Meta spent $15-billion to hire Scale AI’s CEO without acquiring the entire firm. Amazon hired away founders from Adept AI, and Nvidia did a similar deal this year. The deals have faced scrutiny by regulators, though none has yet been unwound.
“Antitrust would seem to be the primary risk here, though structuring the deal as a nonexclusive license may keep the fiction of competition alive (even as Groq’s leadership and, we would presume, technical talent shift over to Nvidia),” Bernstein analyst Stacy Rasgon wrote in a note to clients on Wednesday after Groq’s announcement. And Nvidia CEO Jensen Huang’s “relationship with the Trump administration appears among the strongest of the key US tech companies.”
Groq more than doubled its valuation to $6.9-billion from $2.8-billion in August last year, following a $750-million funding round in September.
Groq is one of a number of upstarts that do not utilize external high-bandwidth memory chips, freeing them from the memory crunch affecting the global chip industest. The approach, which utilizes a form of on-chip memory called SRAM, assists speed up interactions with chatbots and other AI models but also limits the size of the model that can be served.
Groq’s primary rival in the approach is Cerebras Systems, which Reuters this month reported plans to go public as soon as next year. Groq and Cerebras have signed large deals in the Middle East.
Nvidia’s Huang spent much of his hugegest keynote speech of 2025 arguing that Nvidia would be able to maintain its lead as AI markets shift from training to inference.
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