[HN Gopher] Nvidia buying AI chip startup Groq for about $20B in...
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Nvidia buying AI chip startup Groq for about $20B in cash
https://groq.com/newsroom/groq-and-nvidia-enter-non-exclusiv...
Author : nickrubin
Score : 210 points
Date : 2025-12-24 21:02 UTC (1 hours ago)
(HTM) web link (www.cnbc.com)
(TXT) w3m dump (www.cnbc.com)
| rvz wrote:
| Great choice and what a great deal.
|
| Quite obvious that Groq would get acquired. [0]
|
| [0] https://news.ycombinator.com/item?id=39438820
| scratchyone wrote:
| Uh oh, not good that a major Nvidia competitor with genuine
| alternative technology will no longer be competing... Chances
| this tech gets killed post-acquisition?
| pohl wrote:
| Zero. Non-zero only if someone says something deemed "woke".
| wmf wrote:
| It may be more likely that Nvidia sells the LPUv2 at a price
| that doesn't threaten Rubin.
| throwup238 wrote:
| _> Groq is expected to alert its investors about the deal later
| on Wednesday. While the acquisition includes all of Groq's
| assets, its nascent Groq cloud business is not part of the
| transaction, said Davis._
|
| Wait, what? How is the cloud business supposed to run if Nvidia
| is acquiring the rights to the hardware?
| ChristianJacobs wrote:
| That's the neat trick - it isn't...
| garyfirestorm wrote:
| Sell the asset and then lease it from the buyer.
| throwup238 wrote:
| That works fine with office buildings and stuff where a
| company is redistributing its risk profile, but not when
| the company it's selling to has every incentive to kill the
| asset as a competitor.
| onion2k wrote:
| It isn't, and the other companies that offer cloud AI that
| Nvidia has invested in can carry on happy they have one less
| competitor.
|
| This is how business works in the 21st century - once one
| company has a dominant position and a massive warchest they can
| just buy any business that has any potential of disrupting
| their revenue. It's _literally_ the thesis Peter Thiel sets out
| in Zero To One. It works really well _for that one business_.
| fancyfredbot wrote:
| From the press release, Nvidia now has a non exclusive license
| to the hardware.
|
| Groq will continue to operate as an independent company with
| Simon Edwards stepping into the role of Chief Executive
| Officer.
|
| GroqCloud will continue to operate without interruption.
| kreyenborgi wrote:
| There was an AMA here last year
| https://news.ycombinator.com/item?id=39429047
| asdev wrote:
| Chamath is a bonafide scammer, but he makes good investments(gets
| good returns for himself)
| yellow_lead wrote:
| He is good at scamming others
| erichocean wrote:
| nVidia is being scammed here? Seems unlikely...
| superkuh wrote:
| For nvidia increasing the numbers of their money-multiplying
| mutual investment ring is more important than the value of
| the deals. It's about involving more capital and people and
| making their grift too big to fail and keeping the stock
| numbers up. Nvidia has the ability to promise large amounts
| of money like this in announcements but I haven't read about
| any of them actually having money or good exchange hands yet.
| behnamoh wrote:
| I just stopped my Groq API. Sad to see competition being eaten up
| by shitty Nvidia. I like their products but Jensen is an absolute
| mfer with deceitful marketing.
| archerx wrote:
| I literally said "oh no" out loud when I read the headline.
| moneywoes wrote:
| was the API good
| julienfr112 wrote:
| How can this pass antitrust regulation ?
| bigyabai wrote:
| I doubt Nvidia will be regulated in their home jurisdiction.
| America tends to protect it's cash cows, for better or worse.
| rvz wrote:
| There is no "antitrust regulation" in the US in 2025. (Until
| 2029)
|
| States are "not allowed" to regulate AI companies.
| ronyfadel wrote:
| Care to give more details?
| rvz wrote:
| https://www.bbc.co.uk/news/articles/crmddnge9yro
| irl_zebra wrote:
| I don't know specifically, but I think they're referring to
| the current USA administration's posture of approving
| anything, or pardoning anyone, in exchange for some
| cryptocurrency or similar big favour.
| sunaookami wrote:
| There also weren't any antitrust regulations before, let's
| not kid ourselves.
| calmbell wrote:
| There was an attempt under Lina Khan.
| agency wrote:
| > Groq raised $750 million at a valuation of about $6.9 billion
| three months ago. Investors in the round included Blackrock and
| Neuberger Berman, as well as Samsung, Cisco, Altimeter and 1789
| Capital, where Donald Trump Jr. is a partner.
| bonesss wrote:
| They made Jimmy Carter sell his peanut farm...
| DebtDeflation wrote:
| Hopefully they plan to invest in the technology and not just
| eliminate a competitor.
| mdasen wrote:
| They almost certainly plan to invest in the technology. One of
| the biggest threats to Nvidia is people developing AI-centric
| ASICs before they get there. Yes, Google has their TPUs and
| there are others around, but it's early on.
|
| In some ways, it's not about eliminating a competitor. It's
| about eliminating all the competitors. Nvidia can use its
| resources to push AI ASICs farther faster than others,
| potentially cutting off a whole host of competitors that
| threaten their business. Nvidia has the hardware and software
| talent, the money, and the market position to give their AI
| ASICs an advantage. They know if they don't lean into ASICs
| that someone else will and their gravy train will end. So they
| almost certainly won't be abandoning the technology.
|
| But that doesn't mean that it'll be good for us.
| syntaxing wrote:
| I don't see how this isn't anti trust but knowing this political
| climate, this deal will go through.
| mastax wrote:
| https://www.reuters.com/business/nvidias-huang-joins-tech-ti...
| exasperaited wrote:
| Good of them to make a list themselves, isn't it? It'll be
| useful in the future.
| bdangubic wrote:
| as useful as it was before this administration when big
| tech was sucking up to whomever was running the country
| (e.g. "macho man" Zuck was getting ready to tattoo DEI on
| his forehead couple of years ago) or just now it'll be
| magically useful?
| exasperaited wrote:
| You miss my point. This is a list of people engaging in
| something flat-out _corrupt_. The ballroom is an
| inherently corrupt project.
|
| It will prove to be simple corruption.
| bdangubic wrote:
| whats the punishment for corruption (especially when you
| have 100's of billions of dollars) I wonder...
| nutjob2 wrote:
| An American Oligarchy.
| niemandhier wrote:
| I could not figure out if ,,cash" means literally cash or
| figuratively cash in the sense of "no trade in shares".
|
| Will there be a truck full of paper money or not?
| adam_arthur wrote:
| Implies they will pay cash value to equity holders as opposed
| to issuing NVDA shares.
|
| (Electronically)
| SecretDreams wrote:
| Is this to somehow screw the employees with RSUs or what?
| wmf wrote:
| No, it doesn't really matter if they pay in cash or stock.
| If you think NVDA has room to run you're welcome to use
| your buyout money to buy NVDA on the open market.
| diogenescynic wrote:
| It's the latter. They'll send a wire.
| Caius-Cosades wrote:
| Nvidia. Please stop. Just stop it already.
| nextworddev wrote:
| They should have bought nbis
| maz1b wrote:
| Damn. Was hoping Groq and Cerebras would give the giants a run
| for their money.
| piskov wrote:
| There is still Modular
| tacitusarc wrote:
| There are others as well but NVidia is aggressive when it comes
| to punishing companies willing to buy non-NVidia products. As a
| result, they prefer to remain under the radar, at least until
| they have enough market leverage to be more widely known.
| erichocean wrote:
| Well that sucks.
| nusl wrote:
| Legit feels like Nvidia just buying out competition to maintain
| their position and power in the industry. I sincerely hope they
| fall flat on their face.
| A_D_E_P_T wrote:
| > _Legit feels like Nvidia just buying out competition to
| maintain their position and power_
|
| Well, I mean, isn't that exactly what they _should_ be doing?
| (I 'm not talking about whether or not it benefits society;
| this is more along the lines of how they're incentivized.)
|
| Put yourself in their shoes. If you had all that cash, and
| you're hearing people talk of an "AI Bubble" on a daily basis,
| and you want to try and ensure that you ride the wave without
| ever crashing... the only rational thing to do is use the money
| to try and cover all your bases. This means buying competitors
| and it also means diversifying a little bit.
| BoredPositron wrote:
| Dunno thought AGI would make everything obsolete and it's
| just around the corner? It looks rather like it dawns on
| everyone that transformers won't bring salvation. It's a show
| of weakness.
| zapnuk wrote:
| No one is claiming that it's a bad move.
|
| It's just an anti-competitive move that could be very bad for
| the consumer as it makes the inference market less
| competitive.
| piskov wrote:
| Stuff like tinygrad will change this. Geohot already made
| nvidia run on macs via thunderbolt.
|
| Also: https://x.com/__tinygrad__/status/1983469817895198783
| password54321 wrote:
| This guy has the greatest dunning-kruger of all time. Lots of
| smoke and mirrors.
| piskov wrote:
| He's no delusional:
| https://x.com/__tinygrad__/status/1983476594850283820
|
| However, I would say you are wrong about it being only
| smoke
| password54321 wrote:
| Look dude, this guy failed his Twitter internship and is
| not about to take on Jensen Huang. This isn't some young
| guy anymore and this isn't 200x where is he about to have
| another iPhone / Sony moment.
|
| It is peak delulu.
|
| Edit: His whole blog is 'hot take #n'. Not even anything
| serious. Basically podcast bro level stuff. https://geoho
| t.github.io/blog/jekyll/update/2025/12/22/the-o...
| bri3d wrote:
| The bottleneck in training and inference isn't matmul, and
| once a chip isn't a kindergarten toy you don't go from FPGA
| to tape out by clicking a button. For local memory he's going
| to have to learn to either stack DRAM (not "3000 lines of
| verilog" and requires a supply chain which openai just
| destroyed) or diffuse block RAM / SRAM like Groq which is
| astronomically expensive bit for bit and torpedoes yields,
| compounding the issue. Then comes interconnect.
| refulgentis wrote:
| There's this curious experience of people bringing up geohot
| / tinygrad and you can tell they've been sold into a
| personality cult.
|
| I don't mean that pejoratively, I apologize for the
| bluntness. It's just I've been dealing with his nonsense
| since iPhone OS 1.0 x jailbreaking, and I hate seeing people
| taken advantage of.
|
| (nvidia x macs x thunderbolt has been a thing for years and
| years and years, well before geohot) (tweet is non-sequitor
| beyond bogstandard geohot tells: odd obsession with LoC, and
| we're 2 years away from Changing The Game, just like we were
| 2 years ago)
| piskov wrote:
| Can you show any other thing that runs nvidia gpu under
| m-series macs?
| MrDarcy wrote:
| Who cares? Nobody is building large scale inference
| services with macs.
| _zoltan_ wrote:
| which is exactly what a business should do.
|
| it's not like Nvidia doesn't invest a ton into R&D, but hey,
| they have the cash, why not use it? like a good business.
| moffkalast wrote:
| In a normal world, this is where Nvidia gets trust busted.
| But that's long behind us now.
| nickysielicki wrote:
| Groq press release: https://groq.com/newsroom/groq-and-nvidia-
| enter-non-exclusiv...
|
| > Today, Groq announced that it has entered into a non-exclusive
| licensing agreement with Nvidia for Groq's inference technology.
| The agreement reflects a shared focus on expanding access to
| high-performance, low cost inference.
|
| > As part of this agreement, Jonathan Ross, Groq's Founder, Sunny
| Madra, Groq's President, and other members of the Groq team will
| join Nvidia to help advance and scale the licensed technology.
|
| > Groq will continue to operate as an independent company with
| Simon Edwards stepping into the role of Chief Executive Officer.
|
| > GroqCloud will continue to operate without interruption.
| justincormack wrote:
| So it is not structured as an acquisition to avoid anti trust
| but effectively it probably is.
| whatsupdog wrote:
| Yes I'm sure that "non exclusive" partnership is exactly
| that, wink wink!
| gchadwick wrote:
| Another example of the growing trend of buying out key parts of
| a company to avoid any actual acquisition?
|
| I wonder if equity holding employees get anything from the deal
| or indeed if all the investors will be seeing a return from
| this?
| fancyfredbot wrote:
| The price is 40x their target revenue. That's twice the price to
| revenue multiplier applied to Anthropic in their most recent
| funding round, and really really hard to portray as a good deal.
|
| I don't think it really helps Nvidia's competitive position. The
| serious competition to Nvidia is coming from Google's TPU,
| Amazon's Trainium, AMD's Instinct, and to a much lesser extent
| Intel's ARC.
|
| Grow recent investors got back a 3x multiple and may now invest
| in one of Nvidia's other competitors instead.
| la64710 wrote:
| Also Tsavorite scalable intelligence - their architecture seems
| to cover the broadest use cases and compatible with cuda
| _zoltan_ wrote:
| is this an ad? do you work there?
|
| I'm following the chip industry on a daily basis and never
| heard of them...
| arisAlexis wrote:
| And Cerebras
| bri3d wrote:
| The only thing I can think of here is that OpenAI's DRAM land
| grab is going to stack on a non-NV target and NV need to hedge
| with an SRAM design that's on the market NOW. Otherwise, I
| can't see how NV couldn't eat Groq's lunch in one development
| cycle - it's not like NV can't attach a TPU to some SRAM and an
| interconnect. Either that or Groq closed a deep enough book to
| scare them, but 40x is a lot of scared.
| thehamkercat wrote:
| Next they would acquire and kill Cerebras. I hate every part of
| Nvidia
| roughly wrote:
| The absolute best case I can make for this:
|
| I think it's pretty obvious at this point that Nvidia's
| architecture has reached scaling limits - the power demands of
| their latest chips has Microsoft investing in nuclear fusion.
| Similar to Intel in both the pre-Core days and their more recent
| chips, they need an actual new architecture to move forward. As
| sits, there's no path to profitability for the buyers of these
| chips given the cost and capabilities of the current LLM
| architectures, and this is obvious enough that even Nvidia has to
| realize it's existential for them.
|
| If Groq's architecture can actually change the economics of
| inference and training sufficient to bring the costs in line with
| the actual, not speculative, benefits of LLMs, this may not be a
| buy-and-kill for Nvidia but something closer to Apple's
| acquisition of P.A. Semi, which made the A- and M- class chips
| possible.
|
| (Mind you, in Intel's case they had to have their clocks cleaned
| by AMD a couple times to get them to see, but I think we're
| further past the point of diminishing returns with Nvidia - I
| think they're far enough past when the economics turned against
| them that Reality is their competition now.)
| jvanderbot wrote:
| NVIDIA and "no path to profitability" don't belong in the same
| zip code.
| jonah wrote:
| I read it as path to profitability for the AI companies
| buying Nvidia's chips.
| roughly wrote:
| No path to profitability for the people using their products
| for their putative purpose, which seems like it might affect
| Nvidia's bottom line at some point. Clarified.
| wmf wrote:
| _there's no path to profitability for the buyers of these chips
| given the cost and capabilities of the current LLM
| architectures_
|
| Didn't Anthropic say inference is already profitable?
| yoan9224 wrote:
| this is genuinely sad, groq had really fast inference and was a
| legit alternative architecture to nvidia's dominance. feels like
| we're watching consolidation kill innovation in real time. really
| hoping regulators actually look at this one but not holding my
| breath
| exceptione wrote:
| Following the age old playbook of monopolies.
| https://www.arte.tv/en/videos/103517-001-A/capitalism-in-ame...
| (Use a vpn if outside EUR)
|
| A free market is a regulated market. Otherwise you will end up
| with monopolies and a dead market.
| asdfsfds wrote:
| That's great, but LLMs are still not generating revenue.
| latchkey wrote:
| They are generating revenue, profit is the dubious thing.
| SonOfKyuss wrote:
| They're generating tons of revenue, just not necessarily
| profits
| irl_zebra wrote:
| I pay $20/mo for Gemini, so they're generating at least that
| much in revenue!
| SecretDreams wrote:
| All depends on how much it costs them to service your
| $20/month sub in OPEX and how much it cost them in capex to
| buy and maintain that hardware.
| nowittyusername wrote:
| This is the most blatant buy the competition move if i've ever
| seen one....
| dwa3592 wrote:
| This doesn't make much sense- In September, Groq was valued at
| $7B. How is it that in 4 months it is being bought for $20B?
|
| Can someone with better understanding dumb this down for me
| please?
| ZiiS wrote:
| It only has to be overvalued by a lower multiple then NVidia;
| not undervalued.
| wmf wrote:
| Imagine a pharma with a weight loss drug that isn't approved
| yet; it's either worth $20B (if approved) or zero (if not
| approved).
|
| Now imagine the LPUv2 ASIC. If it works it's worth $20B and if
| it doesn't it's zero. If investors think LPUv2 has a 1/3 chance
| of success they would buy in at $7B. Then the chip boots up
| and... look at that.
|
| Or it's just a massive bubble.
| moneywoes wrote:
| eli5 lpu please
| NaOH wrote:
| Related on the business side, and from the last two years:
|
| _AI Chip Startup Groq Raises $750M at $6.9B Valuation_ -
| https://news.ycombinator.com/item?id=45276985 - Sept 2025 (5
| comments)
|
| _Groq Raises $640M to Meet Soaring Demand for Fast AI Inference_
| - https://news.ycombinator.com/item?id=41162875 - Aug 2024 (34
| comments)
|
| _AI chip startup Groq lands $640M to challenge Nvidia_ -
| https://news.ycombinator.com/item?id=41162463 - Aug 2024 (12
| comments)
|
| _Groq CEO: 'We No Longer Sell Hardware'_ -
| https://news.ycombinator.com/item?id=39964590 - April 2024 (149
| comments)
| iamacyborg wrote:
| From $6.9b to 20 in a few months, not bad...
| koakuma-chan wrote:
| Almost as good as forking VSCode, impressive.
| altpaddle wrote:
| I do not understand this move by Nvidia, they are afraid of being
| out competed by this startup in their core competence of building
| chips for AI? They may be eliminating a competitor for now but
| this move will immediately many more AI chip startups to get
| founded
| sthuck wrote:
| groq is a series E hardware startup founded in 2016. It took
| them this long to be a potential threat, I'm not sure they are
| even an actual threat.
|
| Even if this purchase causes 100 new hardware startups to be
| funded tomorrow, nVidia is perfectly fine with that. Let's see
| how many survive 5 years down the line
| reissbaker wrote:
| They're not eliminating a competitor, they're (effectively)
| acquiring a competitor. Nvidia's GPUs are great for training,
| and not bad for inference, but the custom chips are better for
| inference and Nvidia's worried about losing customers. Nvidia
| will no doubt sell custom Groq-like chips for inference now.
| baq wrote:
| the play is 10x faster inference leads to 100x demand give or
| take, which isn't a bad assumption at all if you ask me. the
| problem is actually fitting a good model onto hardware that
| fast.
| siliconc0w wrote:
| Maybe the EU or individual states will sue under their own anti-
| trust laws will stop this - seems pretty clearly anti-competitive
| and probably a prelude of these over-valued companies using their
| stock to gobble up any possible competitor to consolidate even
| more.
| MuffinFlavored wrote:
| Is any part of this because Google has the TPU and Groq has the
| LPU?
| wmf wrote:
| There's definitely a narrative that ASICs/TPUs/LPUs are more
| efficient than GPUs and thus Nvidia "needs" an ASIC. Whether
| this is true is debated.
| why-o-why wrote:
| Can't wait for the abuse of the word Grok to die (bet none of
| these techbros even read the book). There was even an AI company
| that made a product called "Sophon". Talk about an overinflated
| sense of self-worth.
|
| I like the Wright Brothers, they called the first plain, "Flyer".
| andrewinardeer wrote:
| Headline is incorrect.
|
| NVIDIA isn't buying Groq.
|
| It's a non exclusive deal for inference tech. Or am I reading it
| incorrectly?
| impulser_ wrote:
| Are they buying them to try and slow down open source models and
| protect the massive amounts of money they make from OpenAI,
| Anthropic, Meta ect?
|
| It quite obvious that open source models are catching up to
| closed source models very fast they about 3-4 months behind right
| now, and yeah they are trained on Nvidia chips, but as the open
| source models become more usable, and closer to closed source
| models they will eat into Nvidia profit as these companies aren't
| spending tens of billion dollars on chips to train and run
| inference. These are smaller models trained on fewer GPUs and
| they are performing as good as the pervious OpenAI and Anthropic
| models.
|
| So obviously open source models are a direct threat to Nvidia,
| and they only thing open source models struggle at is scaling
| inference and this is where Groq and Cerberus come into the
| picture as they provide the fastest inference for open source
| models that make them even more usable than SOTA models.
|
| Maybe I'm way off on this.
| matthewfcarlson wrote:
| Idk- cheaper inference seems to be a huge industry secret and
| providing the best inference tech that only works with nvidia
| seems like a good plan. Makes nvidia the absolute king of
| compute against AWS/AMD/Intel seems like a no brainer.
| SkyPuncher wrote:
| They need to vertically integrate the entire stack or they die.
| All of the big players are already making plans for their own
| chips/hardware. They see everyone else competing for the exact
| same vendor's chips and need to diversify.
| Workaccount2 wrote:
| Shy of an algo breakthrough, open source isn't going to catch
| up with SOTA, their main trick for model improvement is
| distilling the SOTA models. That's why they they have
| perpetually been "right behind".
| moneywoes wrote:
| is this in response to the threat from Google tpu
| brcmthrowaway wrote:
| What are the other top AI silicon vendors?
|
| Graphcore
|
| Tenstorrent
|
| SambaNova
|
| Rivos
| xvector wrote:
| Put Groq and Nvidia execs in prison, blatant anti-trust.
| nntwozz wrote:
| I remember when Google acquired YouTube in 2006 for $1.65 billion
| in stock.
|
| Media said it was crazy back then, well I think this sounds a lot
| crazier but hindsight is 20/20.
| yousif_123123 wrote:
| Not good. This shouldn't be allowed. What would be better is if
| groq and cerebras combined, and maybe other companies invested in
| them to help them scale. Why would the major cloud providers not
| lobby against this?
|
| Usually antitrust is for consumers, but here I think companies
| like Microsoft and AWS would be the biggest beneficiaries of
| having more AI chip competition.
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