AI chipmaker Groq confirms $650M raise, pivots after Nvidia's not-acqui-hire deal

AI chipmaker Groq confirmed on Monday that it has raised $650 million in new funding, roughly six months after Nvidia signed a non-exclusive licensing agreement for Groq's technology and poached its founder and CEO Jonathan Ross, president Sunny Madra, and other employees. Groq did not disclose its new valuation; it was last valued at $6.9 billion following a $750 million round in September.

Ross, who previously helped create Google's Tensor Processing Unit, co-founded Groq with fellow Google engineer Doug Wightman a decade ago. After the Nvidia deal, Wightman stayed on as CEO. Groq developed a language processing unit (LPU) chip for inference, sold as a cloud service or on-premises cluster. Nvidia now owns the LPU IP and announced its own hardware cluster, the Nvidia Groq 3 LPX, at its GTC event in March.

In response, Groq has pivoted to its neocloud business, which was run by Madra after Groq acquired his AI analytics company Definitive Intelligence in 2024. The neocloud now operates 13 data centers across North America, Europe, the Middle East, and APAC, serving over five million developers and thousands of AI companies, processing trillions of tokens weekly.

Groq has also hired new executives: Alan Rice as COO (previously at xAI, Meta, and the U.S. Navy), Sinclair Schuller as CTO, and Rakesh Malhotra as CPO. Schuller and Malhotra previously co-founded Apprenda and later Nuvalence, which was acquired by EY in 2024. Malhotra spent about a decade working on Microsoft's cloud products.

The company's success now depends on how competitive its inference cloud remains, now that key hardware IP is shared with Nvidia. However, similar deals have seen recoveries: Scale AI's CEO Jason Droege told Forbes that its business rebounded after Meta's $14.3 billion not-acqui-hire deal about a year ago.