The valuation dropped to 3.5 billion US dollars! Former AI chip challenger Groq raised 350 million Nvidia (NVDA.US) may participate after recruiting core talents

The Zhitong Finance App learned that Groq has completed financing of 350 million US dollars, and the valuation reached 3.5 billion US dollars, which is about half of the valuation almost a year ago. At the time, Nvidia (NVDA.US) reached a licensing agreement with this startup and robbed a large number of its talents.

The funding will reportedly be announced on Monday and will be led by Dallas-based investment firm Disruptive. A representative from Groq said Nvidia will also participate in this funding round. Nvidia did not comment on this.

From chip developers to data center operators

Founded in 2016, Groq was one of the startups dedicated to developing self-developed AI chips to challenge market leader Nvidia. At its peak in September last year, Groq's valuation once reached $6.9 billion. A few months later, Nvidia successfully recruited its founder and CEO Jonathan Ross and other core employees through a licensing agreement with Groq. Other big tech companies, including Meta and Google's parent company Alphabet, have also recently absorbed large numbers of talent from AI startups through similar licensing agreements rather than direct acquisitions.

Since then, Groq has been working to transform into a data center operator to meet the huge demand for computing power to run AI software (that is, inference processes). The company previously announced the completion of a $650 million funding round in June to support this transformation. As part of this round of financing, Groq adjusted its valuation, but did not disclose specific figures to the outside world at the time.

Focus on AI inference

Alex Davis, executive chairman of Groq and founder of investment agency Disruptive, said in a statement: “There is no doubt that inference will become the largest and most critical layer of AI infrastructure. We will focus on supporting the most important model builders.”

Groq plans to use part of its recent financing to expand the total data center capacity to over 200 megawatts next year.