Nvidia Strikes Major Licensing Deal with AI Chip Startup Groq, Acquires Key Leadership December 25, 2025 In a strategic move to bolster its dominance in the artificial intelligence hardware market, Nvidia has entered into a significant technology licensing agreement with AI inference chip specialist Groq and will absorb a substantial portion of its leadership team. The deal underscores the intensifying race to develop specialized, low-latency processors for running AI models, a critical and fast-growing segment beyond the initial training phase. According to announcements, Nvidia will license key intellectual property from Groq in a non-exclusive arrangement. Concurrently, Groq founder and CEO Jonathan Ross, along with President Sunny Madra and other team members, will join Nvidia. Ross, who previously led Google's Tensor Processing Unit (TPU) development before founding Groq in 2016, brings deep expertise in custom AI silicon. The company, which raised $750 million at a $6.9 billion valuation as recently as September, will remain an independent entity under its finance head, Simon Edwards, with its GroqCloud service continuing uninterrupted. While specific financial terms were not officially disclosed, reports from CNBC suggest the licensing deal could be valued at up to $20 billion, a figure that has not been independently verified. In a communication to employees, Nvidia CEO Jensen Huang clarified the nature of the transaction, stating, “While we are adding talented employees to our ranks and licensing Groq’s IP, we are not acquiring Groq as a company.” Huang outlined the strategic rationale, noting, “We plan to integrate Groq’s low-latency processors into the Nvidia AI factory architecture, extending the platform to serve an even broader range of AI inference and real-time workloads.” This transaction follows a similar pattern for Nvidia, which spent $900 million in September to license networking technology from Enfabrica and hire its CEO. The Groq deal signals Nvidia's aggressive strategy to co-opt innovative competitors and integrate their specialized technologies directly into its expansive ecosystem. For the AI chip industry, it highlights the immense value placed on inference optimization technology and may accelerate consolidation as market leaders seek to cover every segment of the AI compute stack, from training to deployment. Source: datacenterdynamics
Nvidia Strikes Major Licensing Deal with AI Chip Startup Groq, Acquires Key Leadership
