Nvidia acquires AI chip startup Groq for approximately $20 billion in cash, becoming its largest acquisition

On December 25, according to CNBC, Disruptive, the company leading the latest funding round for Groq, a high-performance AI accelerator chip designer, CEO Davis revealed that Nvidia has agreed to acquire Groq for $20 billion in cash. Since its founding in 2016, Davis’s company has invested over $500 million in Groq, and he stated that the deal was reached quickly. Groq is expected to notify its investors about the deal later on Wednesday evening. Davis mentioned that although the acquisition includes all of Groq’s assets, its early-stage Groq Cloud business is not part of the transaction. This will be Nvidia’s largest acquisition to date, surpassing its previous largest deal in 2019 when it acquired Israeli chip designer Mellanox for nearly $7 billion. With the surge in demand for AI acceleration chips to speed up large language model inference tasks, Groq’s target revenue for this year is $500 million.