One of the world’s biggest chipmaking company Nvidia has agreed on Wednesday December 24,2025 to license chip technology from startup Groq and hire away its CEO, a veteran of Alphabet.
The deal follows a familiar pattern in recent years where the world’s biggest technology firms pay large sums in deals with promising startups to take their technology and talent but stop short of formally acquiring the target.
Groq specializes in inference, where artificial intelligence AI models that have already been trained respond to requests from users.
While Nvidia dominates the market for training AI models, it faces much more competition in inference, where traditional rivals such as Advanced Micro Devices AMD, opens new tab have aimed to challenge it as well as startups such as Groq and Cerebras Systems.
According to Grok, Nvidia has agreed to a “non-exclusive” license to Groq’s technology, reports Reuters.
Grok said its founder, Jonathan Ross, who helped Google start its AI chip program, as well as Groq President Sunny Madra, will join Nvidia.
CNBC reported that Nvidia had agreed to acquire Groq for $20 billion in cash, while neither Nvidia nor Groq disclosed financial details of the deal.
Groq said in its blog post that, it will continue to operate as an independent company with Simon Edwards as CEO and that its cloud business will continue operating.
Bernstein analyst Stacy Rasgon said on Wednesday, “Antitrust would seem to be the primary risk here, though structuring the deal as a non-exclusive license may keep the fiction of competition alive,” and Nvidia CEO Jensen Huang’s “relationship with the Trump administration appears among the strongest of the key US tech companies.”
Groq more than doubled its valuation to $6.9 billion from $2.8 billion in August last year, following a $750 million funding round in September.
Groq is one of the number of upstarts that do not use external high-bandwidth memory chips, freeing them from the memory crunch affecting the global chip industry.
The approach, which uses a form of on-chip memory called SRAM, helps speed up interactions with chatbots and other AI models but also limits the size of the model that can be served.
Groq’s primary rival in the approach is Cerebras Systems, which plans to go public next year.
The deal follows a familiar pattern in recent years where the world’s biggest technology firms pay large sums in deals with promising startups to take their technology and talent but stop short of formally acquiring the target.
Groq and Cerebras have also signed large deals in the Middle East too, while Nvidia’s CEO Huang said Nvidia would be able to maintain its lead as AI markets shift from training to inference.
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