Groq raises $350m at a $3.5bn valuation, half its peak, to fund its cloud pivot
The round, led by Disruptive with Nvidia expected to join, is Groq's second since it licensed its chip technology to Nvidia for $20bn and lost its founder — at half the valuation it fetched a year ago.
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- Groq raised $350 million led by investment firm Disruptive, with Nvidia expected to participate, at a $3.5 billion valuation — down from $6.9 billion a year earlier.
- The round follows a $20 billion deal in December in which Nvidia licensed Groq's chip technology and hired founder and CEO Jonathan Ross along with other senior staff.
- Groq has since repositioned as a "neocloud," running 13 Nvidia-powered data centers and selling GPU compute directly, and plans to expand capacity from 54 to more than 200 megawatts in 2027.
- It is the company's second raise this year: a $650 million round in June kicked off the pivot after the Nvidia licensing deal.
Groq has raised $350 million at a $3.5 billion valuation, in a round led by investment firm Disruptive with Nvidia expected to participate, as the company completes its shift from building its own AI chips to operating as a cloud-infrastructure provider. The valuation is half the $6.9 billion Groq commanded a year earlier.
The round follows a December deal in which Nvidia licensed Groq's chip technology for $20 billion and hired away founder and CEO Jonathan Ross along with other senior leadership — an arrangement widely described at the time as a talent acquisition structured to avoid the antitrust review a formal acquisition would trigger. Groq has characterized the lower valuation not as a down round but as "a new valuation for the post-Nvidia-licensing-deal version of Groq."
Since the licensing deal, Groq has rebuilt itself around GroqCloud, a public cloud platform that now runs 13 data centers across North America, Europe, the Middle East and Asia-Pacific on Nvidia hardware, serving more than 6 million developers and enterprises by the company's account. It plans to expand from 54 megawatts of capacity to more than 200 megawatts during 2027.
This is Groq's second raise this year: a $650 million round in June financed the initial pivot after the Nvidia deal closed. The company that once positioned itself as a chip-design challenger to Nvidia is now, in large part, one of its customers and resellers.
Groq's trajectory is a compact case study in how quickly the ground has shifted under AI-chip startups: a company that raised money to compete with Nvidia's silicon is now raising money to buy more of it. Whether that counts as a sound strategic pivot or an admission that direct competition with Nvidia's hardware was not viable will depend on what GroqCloud's margins look like once the 200-megawatt expansion is actually running paying workloads, not just signed leases.