Groq raises $350M at $3.5B valuation, with Nvidia participation planned

AI inference company Groq has raised $350 million in a new funding round at a $3.5 billion valuation, a significant markdown from its previous valuation just months earlier. The round was led by Disruptive, with Nvidia's participation described as "planned."

The fundraising comes at a pivotal moment for the company, which develops its own SRAM-heavy inference chips deployed across 13 data centers spanning North America, Europe, the Middle East, and Asia Pacific. The new capital injection follows a turbulent period marked by a transformative licensing agreement with Nvidia.

Last Christmas Eve, Nvidia agreed to license all of Groq's technology in a $20 billion deal that also saw the GPU giant hire Groq's founder and then-CEO Jonathan Ross, along with president Sunny Madra and other key team members. Nvidia plans to launch its own Groq-based hardware later this year, and subsequently develop more advanced chips built on Groq's architecture, incorporating Nvidia IP including NVLink.

The departure of its leadership and the emergence of Nvidia as a direct competitor have weighed heavily on Groq's valuation. In September, prior to the Nvidia deal, Groq raised $650 million in a round also led by Disruptive, at a significantly higher $6.9 billion valuation. The latest round represents a near-halving of the company's worth in under a year.

Despite the competitive tension, Groq remains an Nvidia Cloud Partner (NCP), certified to design, deploy, and operate Nvidia accelerated computing to Nvidia's reference architecture and operational standards. The company said it aims to scale its compute capacity from 54MW to over 200MW by 2027, signaling aggressive expansion plans for its inference cloud infrastructure.

Alex Davis, Disruptive CEO and Groq executive chairman, commented on the round: "We are building Groq into the world's leading AI inference cloud. We look forward to continuing our partnership with Nvidia at such an important juncture for the ecosystem. Inference will without a doubt become the largest and most critical layer of AI infrastructure. Our team has unmatched experience operating LPUs at scale and delivering the performance, efficiency, and reliability that the next generation of AI demands. We will be focused on supporting the most important model makers to further contribute to the global growth of innovation and American ingenuity."

The funding round underscores the intensifying competition in the AI inference market, where specialized chipmakers and cloud providers are racing to capture share as demand for large-scale model deployment surges. Groq's ability to secure fresh capital despite its diminished valuation and the looming presence of Nvidia in its niche suggests investors see enduring value in its inference-focused technology and operational expertise.