Nvidia has entered into a non-exclusive licensing agreement with AI chip competitor Groq. As part of this arrangement, Nvidia will hire Groq founder Jonathan Ross, president Sunny Madra, and other employees.
CNBC reported that Nvidia is acquiring assets from Groq for approximately 20 billion dollars. However, Nvidia clarified to TechCrunch that this is not an acquisition of the entire company and did not comment on the full scope of the deal. If the reported figures are accurate, this transaction would represent Nvidia’s largest deal ever. With Groq’s assets, Nvidia is positioned to strengthen its already dominant role in chip manufacturing.
As technology companies race to expand their artificial intelligence capabilities, the demand for computing power has surged. Nvidia’s graphics processing units have become the industry standard for this workload. Groq, however, has been developing an alternative chip known as a language processing unit, or LPU. The company has claimed its LPU can run large language models ten times faster while using only one-tenth of the energy compared to traditional solutions.
Groq’s CEO, Jonathan Ross, has a history of such innovation. During his tenure at Google, he contributed to the invention of the tensor processing unit, a custom AI accelerator chip. Groq itself has experienced rapid growth, having raised 750 million dollars in September at a valuation of 6.9 billion dollars. The company reports that its technology now powers the AI applications of over 2 million developers, a significant increase from roughly 356,000 the previous year.
This story was updated to include Nvidia’s clarification regarding the nature of the transaction.