Nvidia licenses tech from AI startup Groq

Nvidia has entered a non-exclusive agreement to license technology from AI startup Groq. As part of the deal, Groq’s founder, president, and several engineers will join Nvidia.

Groq specialises in AI inference, the process where trained AI models respond to user requests. While Nvidia dominates the market for training AI models, it faces more competition in the inference sector from companies like Groq. The licensing agreement is focused on this technology, as per a Reuters report on the matter.

In an official blog post, Groq stated it will continue to operate independently, with Simon Edwards becoming its new CEO, and its cloud service will remain online. Financial terms were not disclosed. A recent CNBC report, which neither company confirmed, suggested Nvidia had agreed to pay $20 billion for Groq.

The deal follows a pattern where large tech firms secure technology and talent from startups without a full acquisition. Similar arrangements have been made recently by Microsoft, Meta, and Amazon. Analysts noted that structuring the deal as a non-exclusive license may help address potential antitrust scrutiny.

Groq uses a specialised chip design that relies on on-chip memory, which helps speed up AI responses but limits the size of the models it can run. The company raised $750 million last September, more than doubling its valuation, as per Reuters.