Nvidia makes record $20bn deal to buy Groq’s AI chip assets

Nvidia is gearing up to acquire key artificial intelligence (AI) chip assets from Groq in a deal valued at $20 billion in cash, marking the largest transaction in the company's history.

According to investors familiar with the agreement, the deal follows Groq’s recent $750 million funding round in September, which valued the company at roughly $6.9 billion. 

That round included major backers such as BlackRock, Neuberger Berman, Samsung, Cisco, Altimeter, and 1789 Capital. 

Groq has also confirmed it has entered into a non-exclusive licensing agreement with Nvidia covering its AI inference technology, though financial details were not disclosed. 

As part of the arrangement, Groq founder and CEO Jonathan Ross, company president Sunny Madra, and other senior leaders will join Nvidia to help scale the licensed technology.

However, despite the asset sale, Groq will continue operating as an independent company. 

In an internal note, Nvidia CEO Jensen Huang noted that the agreement will allow Nvidia to integrate Groq’s low-latency processors into its AI factory architecture, expanding support for real-time and inference workloads. 

He emphasised that Nvidia is licensing technology and hiring talent, not acquiring Groq outright.

The move also highlights Nvidia’s strong financial position, with more than $60 billion in cash and short-term investments.