By Stephen Nellis
Dec 24 (Reuters) - Nvidia has agreed to license chip technology from startup Groq and hire away its CEO, a veteran of Alphabet's Google, Groq said in a blog post on Wednesday.
Groq specializes in what is known as inference, where artificial intelligence models that have already been trained respond to requests from users. 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.
Groq said that Nvidia had agreed to a "non-exclusive" license to Groq's technology. Groq said that its founder Jonathan Ross, who helped 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 earlier reported that Nvidia had agreed to acquire Groq for $20 billion in cash, but neither Nvidia nor Groq commented on the report. Groq said in its blog post that it will continue to operate as an independent company with Simon Edwards as CEO and that its cloud business will continue operating.
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 use external high-bandwidth memory chips, which free them from the memory crunch affecting the global chip industry. The approach, which uses a form of on-chip memory called SRAM, helps 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 earlier this month reported plans to go public as soon as next year. Both Groq and Cerebras have signed large deals in the Middle East.
Nvidia CEO Jensen Huang spent much of his biggest keynote speech of 2025 arguing that Nvidia would be able to maintain its lead as AI markets shift from training to inference.
(Reporting by Stephen Nellis in San Francisco; Additional reporting by Harshita Mary Varghese in Bengaluru; Editing by Shailesh Kuber and Matthew Lewis)
