Nvidia AI chip challenger Groq raises much more than anticipated, hits $6.9B valuation

AI chip startup Groq confirmed Wednesday that it raised a contemporary $750 million in funding at a post-money valuation of $6.9 billion.  

This topped the rumored numbers when phrase leaked in July that Groq was elevating. At the moment, reviews prompt that the increase could be about $600 million, at close to a $6 billion valuation. 

Groq, which additionally sells information heart computing energy, beforehand raised $640 million at a $2.8 billion valuation in August 2024, making this greater than double the valuation in a few 12 months. Groq has now raised over $3 billion to this point, PitchBook estimates.

Groq has been a scorching commodity as a result of it’s engaged on breaking the chokehold that AI chip maker Nvidia has over the tech business. Groq’s chips usually are not GPUs, the graphics processing items that sometimes energy AI techniques. As an alternative, Groq calls them LPUs, (language processing items) and calls its {hardware} an inference engine — specialised computer systems optimized for working AI fashions rapidly and effectively.  

Its merchandise are geared towards builders and enterprises, accessible as both a cloud service or an on-premises {hardware} cluster. The on-prem {hardware} is a server rack outfitted with a stack of its built-in {hardware}/software program nodes. Each the cloud and on-prem {hardware} run open variations of standard fashions, like these from Meta, DeepSeek, Qwen, Mistral, Google and OpenAI. Groq says its choices preserve, or in some circumstances enhance, AI efficiency at considerably much less value than alternate options.

Groq’s founder, Jonathan Ross, has a very related pedigree for this work. Ross beforehand labored at Google creating its Tensor Processing Unit chip, that are specialised processors designed for machine studying duties. The TPU was introduced in 2016, the identical 12 months Groq emerged from stealth. TPUs still power Google Cloud’s AI services.

Groq says it now powers the AI apps of greater than 2 million builders, up from 356,000 builders when the corporate talked to TechCrunch a 12 months in the past.

The brand new spherical was led by funding agency Disruptive, with extra funding from BlackRock, Neuberger Berman, Deutsche Telekom Capital Companions, and others. Current buyers, together with Samsung, Cisco, D1, and Altimeter, additionally joined the spherical.