After reaching a $20 billion licensing agreement with NVIDIA, Groq seeks $650 million in funding

AI chip startup Groq is seeking up to $650 million in financing from existing investors, following a non-exclusive IP licensing agreement worth around $20 billion signed with Nvidia in December last year.

According to Axios, Groq's investors have received partial cash allocations through the Nvidia deal, with the final cash allocations expected to be completed soon. Building on this, existing shareholders will have the opportunity to participate in a new round of financing for "Groq 2.0", with current investors Disruptive and Infinitum committing to underwrite the financing if it is not fully subscribed.

In terms of business transformation, Groq is shifting its strategic focus from chip hardware development to AI inference services, concentrating on making trained AI models respond efficiently to user requests and evolving towards new cloud service providers for AI inference.

It is worth noting that Groq founder Jonathan Ross, president Sunny Madra, and other core team members have joined Nvidia as part of the agreement. In response, a Nvidia spokesperson stated: "Nvidia purchased non-exclusive licensing of Groq IP and brought in engineering talent from the Groq team to advance our mission of providing leading acceleration computing technology to customers worldwide." Nvidia emphasized that Groq remains an independently operated company and was not acquired.

However, this transaction has attracted regulatory attention. Two Democratic U.S. Senators have written to Nvidia, questioning whether the licensing agreement violates antitrust laws by circumventing merger review procedures; the outcome of the related investigation is still unclear.