Nvidia announced the purchase of Groq startup assets worth $20 billion

Nvidia has agreed to pay $20 billion to buy assets from Groq, a developer of high-performance artificial intelligence accelerators.

According to CNBC, Groq announced in a blog post that it has entered into a non-exclusive licensing agreement with Nvidia for its inference technology. Upon completion of the transaction, Groq founder and CEO Jonathan Ross, along with company president Sonny Madera and other senior executives, will join Nvidia to help advance and scale the licensed technology.

Groq is a startup founded by former Google engineers

Groq also said it will continue to operate as an independent company, with Simon Edwards, the company’s chief financial officer, taking over as CEO.

Alex Davis, CEO of Disruptive, which led the startup’s last funding round in September, told CNBC that Nvidia will receive all of Groq’s assets, and that the company’s fledgling cloud computing business, GroqCloud, is not part of the deal. Groq also announced that GroqCloud will continue to operate without any interruption.

This deal is by far the biggest acquisition in Nvidia’s history. The company’s previous largest acquisition dates back to 2019, when it bought Mellanox for nearly $7 billion. At the end of October, Nvidia had $60.6 billion in cash and short-term investments. This figure was around 13.3 billion dollars in early 2023.

“Jensen Huang”, the CEO of Nvidia, announced that this agreement will expand Nvidia’s capabilities. “We plan to integrate Groq’s low-latency processors into Nvidia’s AI Factory architecture, expanding the platform to cover a wider range of AI inference workloads and real-time processing,” he wrote in an email.

It is interesting to know that Groq was founded by the engineers of Google’s Tensor Processing Unit (TPU); A chip that competes with Nvidia in AI workloads.