Groq raises $350M to fuel its pivot from AI chips to

What happened

Startup Groq has raised $350 million as it continues to pivot from an AI chipmaker to a neocloud company that provides powerful GPUs and AI infrastructure services. 5 billion. 9 billion Groq was valued at last September, just a few months before Nvidia hired the startup’s founder and CEO, Jonathan Ross, and other top talent as part of a licensing deal.

” “We are building Groq into the world’s leading AI inference cloud,” Alex Davis, Groq’s chairman and CEO of Disruptive, said in a statement. ” While inference is in high demand as enterprises scale AI workloads, it’s an open question whether neoclouds will be a profitable enough business to provide returns on their considerable investment in the long term.

That’s not exactly a unique relationship among neoclouds today. Nvidia supplies the GPUs powering clouds from CoreWeave, Lambda, and Nebius, while also investing billions into some of those companies as they race to build more capacity. TechCrunch has reached out to Groq for more information. When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.

Why it matters

” Groq was focused on building its own chips, dubbed LPUs (language processing units), to compete with Nvidia on inference — the type of compute needed to run AI workloads in real time. After it lost its star team, Groq shifted from being a pure AI chipmaker into a cloud and data center provider that operates Nvidia systems, making the remaining Groq company an Nvidia customer.

In June, Groq raised a $650 million round to kick off its pivot. The company intends to scale from 54 megawatts to more than 200 megawatts by 2027. Today, Groq operates 13 data centers across North America, Europe, the Middle East, and Asia Pacific, serving more than 6 million developers, enterprises, and AI-native companies.

What to watch

CoreWeave reported strong second-quarter revenue growth and recently landed major contracts, including with Meta and Anthropic. However, investors remained concerned about the company’s high capital expenditures, heavy reliance on debt, and exposure to rapidly depreciating hardware, and its ability to turn growth into free cash flow. Groq’s financials are still private for now, but its pivot puts the company directly inside Nvidia’s AI infrastructure ecosystem.