AI chip startup Groq confirmed on Wednesday that it raised a fresh $750 million in funding. This new investment gives the company a post-money valuation of $6.9 billion. This announcement tops the rumored numbers from July, when reports suggested the raise would be about $600 million at a valuation near $6 billion.
This funding round more than doubles the company’s valuation in about a year. Groq previously raised $640 million at a $2.8 billion valuation in August 2024. PitchBook now estimates that Groq has raised over $3 billion to date.
Groq has become a hot commodity because it is working to break the chokehold that AI chip maker Nvidia has over the tech industry. The company’s chips are not GPUs, the graphics processing units that typically power AI systems. Instead, Groq calls them LPUs, or language processing units, and refers to its hardware as an inference engine. These are specialized computers optimized for running AI models quickly and efficiently.
Its products are geared toward developers and enterprises and are available as either a cloud service or an on-premises hardware cluster. The on-prem hardware is a server rack outfitted with a stack of its integrated hardware and software nodes. Both the cloud and on-prem hardware run open versions of popular models from companies like Meta, DeepSeek, Qwen, Mistral, Google, and OpenAI. Groq says its offerings maintain, or in some cases improve, AI performance at a significantly lower cost than alternatives.
Groq’s founder, Jonathan Ross, has a particularly relevant pedigree for this work. He previously worked at Google developing its Tensor Processing Unit chip, which are specialized processors designed for machine learning tasks. The TPU was announced in 2016, the same year Groq emerged from stealth. TPUs still power Google Cloud’s AI services today.
Groq says it now powers the AI apps of more than 2 million developers. This is a substantial increase from the 356,000 developers the company reported a year ago.
The new funding round was led by the investment firm Disruptive. Additional funding came from BlackRock, Neuberger Berman, and Deutsche Telekom Capital Partners, among others. Existing investors, including Samsung, Cisco, D1, and Altimeter, also joined the round.