Groq raises $650M after Nvidia $20B deal to build AI cloud

Groq, an artificial intelligence chip startup, is raising up to $650 million from its existing investors to fund a new entity called Groq2, a move that follows a landmark licensing and asset deal with Nvidia valued at approximately $20 billion. This new capital will be used to pivot the company away from designing its own semiconductor hardware and toward building specialized AI cloud infrastructure.

The fundraising effort, which is being offered pro rata to current shareholders, comes just months after the completion of the transaction with Nvidia. That deal, structured as a non-exclusive technology license and asset sale, saw Nvidia acquire Groq's AI inference technology assets and hire much of its senior leadership team, including founder and CEO Jonathan Ross and President Sunny Madra. A spokesperson for Nvidia clarified at the time of the agreement that the company had not acquired Groq outright but had licensed its intellectual property and hired engineering talent.

Under the terms of that December agreement, Groq retained ownership of its intellectual property and its cloud computing business, GroqCloud. The company emphasized that its cloud platform would continue...