[HN Gopher] Nvidia to buy assets from Groq for $20B cash
___________________________________________________________________
Nvidia to buy assets from Groq for $20B cash
https://groq.com/newsroom/groq-and-nvidia-enter-non-exclusiv...
Author : nickrubin
Score : 648 points
Date : 2025-12-24 21:02 UTC (1 days 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.
| jimmySixDOF wrote:
| The business model at Groq basically morphed over time so the
| internal cloud was their only client and all purchases were on
| some revenue sharing basis to finance set up and operate the
| cloud business. So this has a bigger impact on those Cloud
| hardware operators to the extent they were involved in the
| discussions with Nvidia. Saudi Aramco comes to mind, as an
| early big check investor, who hosts much of the Groq Cloud
| today. So now Nvidia is their sole source supplier and the
| whole Tokens-as-a-Service business model they signed up for is
| re-negotiated ?
| kreyenborgi wrote:
| There was an AMA here last year
| https://news.ycombinator.com/item?id=39429047
| 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
| behnamoh wrote:
| fast but furiously expensive
| Imustaskforhelp wrote:
| Honestly cerebras is good. I can recommend it. I talked to
| their team once on discord as a literal free user so that
| was something really nice personally
|
| They were also the faster one compared to groq but they
| were always a little slow on adding new models compared to
| groq but not sure what changed right now.
|
| Definitely recommend cerebras tho now that groq's been
| eaten up from inside basically
| highmastdon wrote:
| I had the feeling that Cerebras only supports smaller
| modes. Maybe something to do with their hardware arch? I
| never dove into it. I wanted to use Kimi K2 fast for
| coding and Groq was the only fast provider at the time
| kroaton wrote:
| Cerebras currently has GLM4.6 on it, and will be getting
| GLM4.7 soon.
| pyk wrote:
| As a relative laymen in this hardware inference space, I am
| curious what exactly was Groq useful for vs. the typical
| hardware architecture? Or was this a "step in before they
| become more generally useful" situation for Nvidia/Groq?
| maroon_unperson wrote:
| Much faster responses, before this deal I thought it would be
| Google vs Groq for the superior tech with nvidea missing out.
| 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.
| kergonath wrote:
| The regulations are still in place. They are not enforced,
| however.
| 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...
| quesera wrote:
| That's the thing though -- no one _made_ Jimmy Carter sell
| his farm[0].
|
| But Jimmy Carter was an honorable human, and, well...there
| are fewer people fitting that description sitting behind
| the Resolute desk, today.
|
| [0] He didn't sell it, he put it into a blind trust. He
| should have sold it. When he left office, the farm was $1MM
| in debt.
| 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...
| mrbungie wrote:
| Why is that relevant if there is no one willing to
| prosecute and convict?
| bdangubic wrote:
| it is completely irrelevant but people still waste
| internet bandwidth with nonsense :)
| wyre wrote:
| A forest can still exist despite people choosing to not
| see or look at it.
| bdangubic wrote:
| so corruption exists, that's the pitch? learned something
| new today...
| nutjob2 wrote:
| If justice is served it'll be knocked down by the next
| admin, if it is ever built.
| deaux wrote:
| Why would it have to take 4 years? It sure hasn't taken
| the current admin 4 years to disappear people into
| Salvadorian torture prisons.
| moogly wrote:
| Destroying things and outsourcing to already-built
| prisons is easy. Building things is not.
|
| All they have is a demolition site. There's no final
| design. Trump keeps changing his vision of his mausoleum.
| They don't have an architect since the previous one quit.
|
| They have less than a week to submit construction
| plans[1], and they're clearly missing that deadline. It
| is of course not the end, but it's a sign of things to
| come, about half a year in.
|
| Trump is personally running the project instead of
| delegating it and as we all know he's ruled by whims and
| disorganized plus rapidly mentally deteriorating at 79
| years of age. He's talking about getting into heaven and
| desperately slapping his name on random physical things
| because he's obsessed with leaving a grandiose "legacy",
| any kind of mark on history. He will, but it'll rather be
| as a seditionist and corrupt ravager of civil
| institutions and the rule of law -- a pitiful despoiler.
|
| There's no section about the ball room in Project 2025,
| and no one else but Trump cares about this pet project.
|
| [1]: https://www.cbsnews.com/news/judge-denies-request-
| to-tempora...
| tormeh wrote:
| Are you sure this is how he'll be remembered? Half the US
| thought him preferable to AOC and Hillary Clinton. It's
| hard to conclude in any other way than that the
| perception of his legacy will be equally divided.
| crote wrote:
| Most of his actions are, to the majority of the
| population, merely transient actions. A few letters on an
| arts center are trivial to remove, a cancelled wind
| turbine farm easy to forget. The CECOT stuff deeply
| impacts only a small part of the population, so it'll at
| most be a few lines in a history book.
|
| But demolishing a third of the White House? That'll be
| clearly visible in every single aerial shot of the
| building during every single political event for _years_.
| It is, quite literally, a scar on the political face of
| the country.
|
| It's like turning the Pentagon into a Square, or blowing
| Washington's face off Mount Rushmore, or selling Alaska
| back to Russia: you're not going to forget when you are
| constantly being reminded of it.
| bdangubic wrote:
| actions might be transient but, like or not (I certainly
| do not) will be _the_ President that is remembered and
| talked about more than just about all of previous ones
| combined
| nutjob2 wrote:
| > Half the US thought him preferable to AOC and Hillary
| Clinton
|
| What do those people have to do with anything besides
| being popular right-wing targets?
|
| His approval rating is currently around 42%.
| bdangubic wrote:
| what were his predecessors approval ratings? 42-45% is as
| good as you'll ever going to get in America outside or
| extreme situations like post 9/11.
| zeryx wrote:
| The problem is, if everyone knows it going to curry favour
| and you're the odd man out - are you in Violation of your
| fiduciary duty to your shareholders?
| nutjob2 wrote:
| An American Oligarchy.
| dagmx wrote:
| It'll go through. It's not an acquisition, it's an exclusive
| licensing deal. Same end result, but it lets them runaround the
| usual regulatory approvals for acquisitions.
| jedberg wrote:
| > this deal will go through
|
| It should be noted that Don Jr. is one of the investors who
| will benefit greatly if/when this goes through.
| 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.
| SecretDreams wrote:
| Well, this isn't framed as a buyout/takeover, so I was
| curious how existing RSUs would be cashed out?
|
| This deal is framed as IP transfer and talent transfer
| without owning the full company. Probably to skirt anti
| trust, among other things.
| adam_arthur wrote:
| I'm not sure in this specific case. They could choose to
| pay the employees some portion of the funds.
|
| If not, the owners are likely liable to be sued for
| "selling in effect" without paying equity holders.
|
| Presuming the company becomes a defacto subsidiary of
| Nvidia (even if not legally so)
|
| My guess, without researching it, is they will compensate
| existing equity holders to avoid that possibility. I mean
| the valuation multiple is enormous, it's worth it simply
| to derisk the legal aspect.
| wmf wrote:
| For vested RSUs it's likely that the Groq husk will pay
| out the $20B as a dividend or buyback or something. I
| don't know if unvested RSUs are accelerated or just
| canceled. Of course the employees will receive new RSUs
| when they join Nvidia.
| diogenescynic wrote:
| It's the latter. They'll send a wire.
| lotsofpulp wrote:
| Unless one is worried about the government, no one ever means
| paper money.
| 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
| jampekka wrote:
| And China.
| anonzzzies wrote:
| Which China players are doing inference hardware? As indeed
| that is a good space for them.
| piskov wrote:
| Huawei
| jimnotgym wrote:
| It would be interesting if it turned out that Chinese
| competition was the only thing that kept this market
| working!
| Imustaskforhelp wrote:
| I imagine 2 big giants basically (Nvidia/google/amd
| basically influenced by a few select of people) vs
| (Chinese companies who have investments from the govt)
|
| its sort of like proxy wars and this is sort of whats
| happening in software side of things with open source
| models but I think that the benefit of the proxy wars is
| going to be for the end consumers
|
| But although on the other hand, having two large
| countries compete with each other while buying everything
| else and all feels like it astronomically increases the
| price if someone wants to compete with these two giants
| (any other country perhaps)
|
| We definitely need a better system where it doesn't feel
| like we are seeing pacman eat everything up basically
| SecretDreams wrote:
| > Nvidia/google/amd
|
| One of these things is not like the others
| wyre wrote:
| Is it not? All this money is going into AI under the fear
| that China will win the race to AGI. China releases open-
| source models that keep OpenAI/Anthropic researching and
| training their models, which in turn creates demand for
| more Nvidia GPUs.
| 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.
| cmrdporcupine wrote:
| I guess I have some hope for Tenstorrent
| 7e wrote:
| Yes, Groq failed. But there will be others.
| 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...
| piskov wrote:
| And where do you think he's wrong in that post?
| 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.
| piskov wrote:
| The main point is that it will not be an nvidia's monopoly
| for too long.
| 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.
| piskov wrote:
| Because this is exactly the demonstration of abstraction:
| the same stuff allows direct gpu communication so that
| even mac nvidia thing is possible.
|
| It is not tied to nvidia as well.
|
| This is the power of tinygrad
| refulgentis wrote:
| My deepest apologies, I can't parse this and I earnestly
| tried: 5 minutes of my own thinking, then 3 llms, then a
| 10 minute timer of my own thinking over the whole thing.
|
| My guess is you're trying to communicate "tinygrad
| doesn't need gpu drivers" which maybe is transmutated
| into "tinygrad replaces CUDA" and you think "CUDA means
| other GPUs can't be used for LLMs, thus nvidia has a
| strangehold"
|
| I know George has pushed this idea for years now, but,
| you have to look no further than AMD/Google making
| massive deals to understand how it works on the ground.
|
| I hope he doesn't victimize you further with his rants.
| It's cruel of him to use people to assuage this own ego
| and make them look silly in public.
|
| Re: has someone else does this?
| https://github.com/albertstarfield/apple-slick-rtx (May
| 2024, 19 months ago. didn't bother looking further than
| 4th google result for "apple silicon external gpu")
| piskov wrote:
| > Compute Workload Test: This will be add soon
|
| Wonder what happened that it never came.
|
| > Willy's got his i3-12100 Gen RTX3090 hosted on Ubuntu
| with Juice Server
|
| E-gpu my ass
| _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.
| nusl wrote:
| What a business should do, sure. Businesses should - and do -
| do a lot of really shitty things because it benefits them but
| harms a lot of other things. I don't feel that it's a good
| justification to argue this way though.
|
| In this case, removing a competitor, absorbing their IP, and
| maintain their ability to dictate the direction of an entire
| industry. They're hurting the industry itself by removing
| competition, since competition is good for consumers and also
| good for progression forward.
|
| Businesses with a monopoly of some sort often stop innovating
| in the space and end up slowing the entire thing down. Often,
| they do their best to block anything and anyone that tries to
| do better, and effectively keep progress back in doing so,
| simply to maintain their position.
|
| They're selfish self-preserving entities often driven by the
| same kinds of people, disregarding the harm they do in the
| name of profits and shareholder "value". Sure, until someone
| disrupts that (or they get bought out and dissolved).
| cmrdporcupine wrote:
| That's unfortunately what most acquisitions are.
| 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!
| DivingForGold wrote:
| Indeed, as justincormack comments: "It is not structured as
| an outright acquisition to avoid US Gov't anti trust
| scrutiny, but effectively it probably is". "Non-exclusive" ?
| Ummmm, yeah, right, sure. You can probably bet there is an
| private understanding that Groq will no longer offer it's
| "top of the line" best technology to competitors of Nvidia.
| Some may see this as a clever, "slight of the hand" attempt
| for Nvidia to maintain it's perceived dominance & lead in
| GPU-TPU development. "Non-exclusive" does not in any form or
| fashion spell out that all Nvidia's competitors can and will
| obtain the very top, cutting edge Groq technology as Nvidia
| will obtain . . .
| biggc wrote:
| What generated this comment?
| rising-sky wrote:
| Grok... with a k
| symbogra wrote:
| Probably a good old fashioned Mk 1 Human Brain given the
| use of "slight of hand"
| janderson215 wrote:
| GPT1 Nano
| deaux wrote:
| Looks like a normal comment to me, what makes you think
| otherwise? It has pretty much no hallmarks of being
| generated, and plenty that point towards the opposite.
| squigz wrote:
| Starting the comment pointing out the name of the user
| you're replying to, and quoting the exact comment you're
| replying to, does sound really strange.
| tibbar wrote:
| I think it's intended as a response to a sibling comment.
| ilikehurdles wrote:
| Quoting the user it's replying to in third person, and
| then hallucinating words inside the quote.
|
| When I have asked LLMs to read/dictate a linked text, the
| output is usually not a clean read but something
| reinterpreted with its own style.
| 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?
| lumost wrote:
| I wonder if such deals will create employee lawsuits. I'd
| certainly be looking at legal options if I was one of the
| founding employees.
| wmf wrote:
| The employees are getting paid twice.
| sleepingreset wrote:
| wdym?
| wmf wrote:
| They get a share of the $20B plus now they get to work
| for Nvidia.
| idiotsecant wrote:
| The employees are getting paid zero times.
| petcat wrote:
| do they make a salary
| simonh wrote:
| If part of their remuneration is in shares, they have a
| legitimate interest in the value of those shares.
| crote wrote:
| Startups often pay a shitty salary in exchange for a
| decent chunk of stock options, with the implicit promise
| that you'll make bank if you work hard and make the
| company successful.
|
| Getting screwed out of your payout by such a totally-not-
| an-acquisition is wage theft. It's like promising a
| sales-related bonus at the beginning of the year, and
| then in December changing the metric to "AI-related sales
| to the CEO's golf buddies".
| tgma wrote:
| The implicit promise is only partially true. Very rarely
| you can find a proven talent that will actually forego
| significant salary. Often time when that happens the
| person is close to founders and will have a significant
| role in shaping the startup and will get quasi-acquired
| too.
|
| This promise may have been more true before 2010s where
| public companies were not paying as much in liquid cash
| and private companies were not valued so aggressively.
| Fact is most employees take the startup offer because
| they don't actually have a liquid offer that's super
| competitive at that moment, or they are just kind of
| bored and taking a break of the corporate job that does
| not give them too many responsibilities, i.e. they are
| compensated via the title, not just the promise of making
| bank.
| petcat wrote:
| Startup options are worthless. The only value most people
| will ever extract from a startup is the experience they
| had working there, and the salary that was put in their
| bank account.
|
| I understand that a lot of inexperienced people (like in
| this thread) think they're going to get rich though.
|
| No, it is not "wage theft" to not get rich when the
| company exits (by whatever means).
| abustamam wrote:
| Startup options are usually worthless, yes, because very
| few startups end up getting to a position where the
| options are worth something.
|
| > No, it is not "wage theft" to not get rich when the
| company exits
|
| I don't think anyone in this thread thinks they're gonna
| get rich by working for a startup. There's a hope that
| they will, that's why they are working, but there's no
| expectation. Maybe there's an expectation of getting a
| nice tidy sum after an exit (in the 5 or 6 figures) but
| not in the 7 or 8 figures, at least not if they're just
| employees and not founders.
|
| What's being discussed is a startup exiting for billions
| of dollars and the employees with equity seeing zero of
| it.
|
| Working for a startup usually means lower wages and
| longer hours, for the chance at striking it rich if the
| company succeeds. If employees don't see anything when
| the company succeeds, there's literally no upside to
| working for a startup.
| lumost wrote:
| I recall having to sit through many trainings on how to
| value employee equity. My experience is that most startup
| employers try to BS what it means to convince people to
| value their equity at a significantly higher price than
| they otherwise should.
|
| If the employer is _explicitly_ making the employee
| options worthless, then they should be obligated to
| disclose this. Otherwise it's trivial to engineer a
| corporate entity which pays the employees while
| "licensing" the technology from an IP holding firm. Later
| they can simply sell the IP holding firm without owing
| employees a dollar.
| SilverElfin wrote:
| It is absolutely wage theft. Equity is part of the deal.
| Abusing some legal loophole to deprive employees of
| ownership and liquidity is not okay.
| crote wrote:
| Nobody _expects_ to get rich off working for a startup.
| The risks are massive, and very few exit with billion-
| dollar deals. This is taken into account by the people
| who work there and accept those stock options: 99.xx%
| chance of being worth essentially zero, but a tiny _yet
| nonzero_ chance of being able to retire early when it
| does a billion-dollar exit. It 's a lottery ticket, not a
| promise - every startup employee understands that.
|
| Groq is now changing the deal after the fact by making
| those stock options worthless 100% of the time. It's like
| you participate in a lottery, and then the organizer
| decides to just not do a draw and keep all the proceeds
| for themselves. Sorry, but that's theft.
|
| Don't intend to pay out in the unlikely event that you
| hit it big? Then don't offer stock options to your
| employees and pay market-rate salaries - plus of course a
| decent premium for the fact that (unlike an established
| company) your startup can go bust at any time and doesn't
| offer stable employment. You can't have it both ways.
| sandworm101 wrote:
| >> one of the founding employees
|
| If you were an employee, you were not a founder. A
| founding-employee would be someone who explicitly
| "invested" time/money into a company without compensation.
| If you are also an employee earning a wage you better have
| a written agreement stating what amount was "investment"
| and what amount was compensated wage.
| lumost wrote:
| Startups typically offer employees, particularly early
| employees, substantial equity compensation. If the
| employer is offering this compensation in bad faith, or
| otherwise preferring one equity holder over another
| without an explicit contract - then they are at the very
| least a crappy business partner. A founding engineer with
| a 2% stake could be missing out on 5-10 million of this
| transaction.
|
| As an aside, most founders are paid during the entire
| project. It's not hard to raise a preseed round to get
| yourself paid for 6-24 months to work on an idea. If a
| founder _chose_ to bootstrap - that's all fine, but let's
| not pretend that the employees aren't taking massive
| career risks vs "standard" employers.
| lovich wrote:
| > If the employer is offering this compensation in bad
| faith, or otherwise preferring one equity holder over
| another without an explicit contract - then they are at
| the very least a crappy business partner.
|
| I don't know about you, but every company I've ever
| worked at is a shitty business partner if that's the
| metric. The standard has always been I get what we agreed
| to if I was lucky, and otherwise I got full "I've altered
| the deal, pray I don't alter further" and dared you to
| defend your rights.
|
| I actually have called their bluff a few times and gotten
| some money out of it, but it was always a year long event
| or more to resolution and involved risking even more
| money on lawyers.
| crote wrote:
| Just one slight problem: people need to eat, and food
| costs money.
|
| Your startup won't succeed when its founder starves to
| death. It's why the founder will usually get a bunch of
| cash during investment rounds [0]: they can't focus on
| the company if they are constantly worried about cash in
| their personal life. Unless the founder is already
| independently wealthy, it is a _guarantee_ that they 'll
| be employed by the company and being paid a living wage.
| Heck, in some countries this is even _legally required!_
|
| According to your logic, no successful startup will ever
| have a founder, as _any_ form of pay instantly degrades
| them to regular employee, and any kind risk taken and
| below-market salary is completely irrelevant. Never mind
| the fact that they are taking home a minimum-wage salary
| while working 100 hours a week - they are earning a wage
| so they can 't possibly be a founder.
|
| So if this logic already breaks down for the founder, why
| couldn't it also break down for early employees whose
| compensation is mostly in stock options? How is their
| situation any different from the founder's?
|
| [0]: https://www.stefantheard.com/silicon-valleys-best-
| kept-secre...
| sandworm101 wrote:
| >> one of the founding employees
|
| If you were an employee, you were not a founder. A
| founding-employee would be someone who explicitly
| "invested" uncompensated time/money into a company without
| compensation and also worked as an employee. If you are
| also an employee earning a wage you better have a written
| agreement stating what amount was "investment" and what
| amount was compensated wage.
| SilverElfin wrote:
| It should. Look at what happened at Windsurf when Google
| did something like this
|
| https://news.ycombinator.com/item?id=44673296
| jbkkd wrote:
| I have a friend who worked in a company that got "not
| acquired" in a similar deal.
|
| She didn't see a dime out of it, and was let off (together
| with a big chunk of people) within 6 months.
| sigmoid10 wrote:
| As this gets more common, I think it will eventually lead
| to startups having a hard time attracting talent with
| lucrative equity compensation. It will be interesting to
| see how long it takes until this catches on among
| employees, but I already wouldn't take any positions in
| startups with a significant payment in equity anymore. The
| chances are slim that this pays out anyways, but now even
| when you are successful, noone will stop some megacorp from
| just buying the product and key employees and leaving
| everyone else with their stake in the dust.
| oblio wrote:
| With the job market being in the state it is in, there
| will always be people wanting to take their chances.
|
| Let's face it and accept that the golden days of people
| working in tech startup (and soon large companies) are
| over.
|
| RIP 1980 - 2023.
| throwawayqqq11 wrote:
| Looking at GDP, the golden age is still right here.
|
| https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locat
| ion...
|
| /s
| seehafer wrote:
| Though (very) unevenly distributed
| CuriouslyC wrote:
| Different kind of gold raining down on us now though
| bugsense wrote:
| You should have just bought gold
| throwawayqqq11 wrote:
| Naa, just wait, its dribbling down.
| bdangubic wrote:
| it always dribbles down after it dribbles up and then it
| dribbles down again...
| SecretDreams wrote:
| Need this plotted against cumulative American debt lol
| oblio wrote:
| LOL@Americans waking up.
|
| I guess you'll have to face the music at some point.
| zipy124 wrote:
| It's already happening. You need a good lawyer to read
| equity terms to make sure you aren't going to get rug
| pulled by a founder later on. Even so I still consider
| equity to generally be worth zero unless the founder is
| someone I trust fully, since there are so many ways for
| them to legally not give you anything.
| kasey_junk wrote:
| At my last job search I didn't consider any equity based
| startups seriously because of this trend. It was already
| such a tenuous path as it stood, but now with the norm
| established it seems like it's become impossible for a
| rank and file employee to get paid out.
|
| I'm more curious how angel investors are being treated in
| these exits. If _they_ dry up the whole pipeline goes
| away
| keeganpoppen wrote:
| that is a great point. it's one thing to occasionally
| rugpull employees, who are still at least paid for their
| services and robbed only of their EV on their options (i
| say "only", though i find this increasingly common
| practice to be absolutely deplorable, to be clear). but
| how could investors possibly be happy with this becoming
| the new normal? will it get to the point where these
| sorts of faux acquisitions also involve paying out
| investors and _only_ shafting employees? at that point
| you are only really even getting like a 20% discount over
| acquiring the company outright, which hardly seems worth
| it. which is to say that your point is very astute: the
| investors are definitely the linchpin here.
| baruch wrote:
| The company still got $20B of cash(?) in its books, it
| can pay dividends to its shareholders (investors) and
| they get their payment. The company can go down the drain
| afterwards. If it can still make money with its remaining
| assets that's only a nice small bonus.
|
| So the only ones getting shafted are the employees.
| SecretDreams wrote:
| > will it get to the point where these sorts of faux
| acquisitions also involve paying out investors and only
| shafting employees?
|
| Yes, correct
| danielheath wrote:
| 20% of 20b isn't exactly loose change, even for a
| megacorp.
| cmrdporcupine wrote:
| The equity in almost all startups has already been a bait
| and switch for more than a decade. Most will refuse to
| answer you about % of equity share anyways, but if they
| did it's tiny tiny amounts, and in the end half the time
| it's up to the acquiring entity just how seriously they
| end up taking it. If you landed at an entity like Google
| (as I did from the place I was working 15+ years ago) you
| could be treated well. Elsewhere, not great.
|
| During boom times it made more financial sense to go
| straight to a FAANG if you could.
| h2zizzle wrote:
| >As this gets more common
|
| Boy, it would be so nice if a major correction were to
| drain these massive companies' warchests so that it
| _doesn 't_ become more common.
| citizenpaul wrote:
| If you ask me there has been a major shift into trying to
| make "startups" into just another form of corporation. It
| started years ago when I started seeing things like
| "Founder Engineer - 0.5% equity" in jobs here.
| Eridrus wrote:
| Can you say more about why mechanically she didn't get
| anything?
|
| If you exercise your options you have real stock in the
| company, so I don't see how you can get shafted here.
|
| Did investors do some sort of dividend cash out before
| employees were able to exercise their options? (Obviously
| shady, but more about investors/leadership being unethical
| than the deal structure).
|
| Would love to know more about how this played out.
| kasey_junk wrote:
| Multiple share classes are the norm even before the new
| acquisition types we see here. It's extremely common in
| an acquisition for employee shares to be worth nothing
| while investor and founder shares are paid out.
|
| But these new "acquisitions" aren't even that. They are
| not acquisitions at all. They just hire the talent
| directly with perhaps an ip rights agreement thrown in as
| a fig leaf.
| Eridrus wrote:
| I'm well aware of dual class shares, but preferences are
| typically 1x, and none of the deals were for less than
| the amount raised, so they're not relevant here.
|
| The fact that these are not really acquisitions doesn't
| change the fact that Groq the entity now has $20b.
| depr wrote:
| Groq doesn't keep that money, it goes to VCs. They claim
| the company is "pivoting", not "selling" and avoid the
| payout trigger.
| isubkhankulov wrote:
| There have been at least a half dozen of these deals in
| the past 1-2 years including Google "licensing"
| CharacterAI to pull their founders back into Google as
| valued employees.
|
| In the deal mentioned above: my guess is that preferred
| class shareholders and common shares got paid out but the
| common shareholders had such a low payout that it rounded
| down to zero for most employees.
|
| This can happen even in a regular acquisition because of
| the equity capital stack of who gets paid first.
| Investors typically require a 1x liquidation preference
| (they get their investment back first no matter what).
| Eridrus wrote:
| Liquidation preferences are typically 1x these days, so
| they only matter when companies are sold at fire sale
| prices where basically nobody is making any money.
|
| The deals are all weird so it's hard to really know
| what's happening, but if Groq gets $20b, I don't see how
| common stock holders don't get paid.
| SecretDreams wrote:
| Special dividend to priority class and retain the rest to
| grow the remaining sham company?
|
| I've seen some discussion that paying out normal
| employees might look more like an acquisition on paper
| which they may want to avoid for ftc reasons. I've also
| seen some discussion that this is a quid pro quo to the
| trump family to get Nvidia back into China (jr. bought in
| at the September financing round..).
|
| Lots of speculation in general, including why nvda chose
| to spend 20bil on this.
| mupuff1234 wrote:
| If I had to guess I'd say investors get their returns but non
| exec employees mostly get screwed.
| snarf21 wrote:
| I was involved in a (obviously smaller) situation with an
| acquisition that went to a top consumer CPU maker (you can
| guess). The investors got nothing as the buyout money was
| used to fund new pivots in the existing company. So no
| options or shares were monetized and investors maintained
| their existing stake that had technically the save value,
| just most of the value was temporarily all cash. The only
| people to make out were the ones who went with the asset
| sale (retention bonus stuff) and the leadership that stayed
| (raises, etc.)
| benjaminwootton wrote:
| It's yet another way for investors to screw early employees
| whose face doesn't fit.
| chaostheory wrote:
| Is it related to the FTC's "anti-monopoly" stance with Khan?
| It's continue under the Trump admin since her successor
| supposedly approved of her work
| bossyTeacher wrote:
| > 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.
|
| A really strange agreement where top executives of a company
| "join" another company for the benefit of the other company.
|
| If it quacks like a duck...
| idiotsecant wrote:
| In the current political climate you only need to slightly
| pretend to care about the appearance of being a monopoly,
| just enough to give plausible deniability in a sound bite.
| Anything else isn't worth it.
| SilverElfin wrote:
| This seems a lot like something where the acquirer avoids
| paying for equity. With key leaders gone what do employees of
| Groq get? Their company isn't being acquired really so they
| just stay illiquid?
| 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.
| fancyfredbot wrote:
| That's an interesting take, it's plausible Nvidia wants to
| have an SRAM based product, but I am struggling to see why
| they would pay $20bn to have one /right now/. Even if DRAM
| prices make Groq's approach more economical, Nvidia can
| develop a competitive product before Groq could take any real
| market share.
| bri3d wrote:
| Exactly. The only way this makes sense to me is if the
| board needed this product in <1 cycle. Which makes no sense
| for a market player like NV who already have the PDK,
| volume, and literally everything else in the universe. But
| here it is, so there is clearly a factor I have not
| considered :)
| ece wrote:
| Would a Groq chiplet be worth $20B? If you bundle it
| while no one else can, maybe..
| xgbi wrote:
| I want to subscribe to your AI wars news please!
|
| Joke aside, the strategic choices here and there hint at the
| blood lust of all other actors to dethrone Nvidia, it's
| fascinating.
| Imustaskforhelp wrote:
| But if all of these large companies create a monopoly where
| they realize that if they start undercutting each other or
| innovating too extremely then long term if Nvidia's stock
| decreases in value by a huge margin, the whole market itself
| can get down
|
| As an example: if google TPU (perfected?) itself to the point
| that it hurts nvidia sales (maybe mass production perhaps?)
| then all the companies stock price might decrease (in my
| opinion including google)
|
| Honestly, I feel like there is going to happen something in the
| market which is gonna be very spooky soon regarding AI.
|
| I feel like we are gonna drag this bubble really long and
| actually worsen all the pain which is gonna be caused by it
| long term.
| 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?
| roughly wrote:
| Presuming that's why they raised 3 times this year.
| shwaj wrote:
| Inference being profitable doesn't mean that they're
| selling enough inference to offset their other costs.
| 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.
| incrudible wrote:
| ...except they are a rather small hardware startup, there is a
| dozen other rather small hardware startups they did not buy,
| and there will be more such startups funded just on the news
| that NVIDIA bought one at a big premium.
| exceptione wrote:
| I understand your line of reasoning, but the net effect is
| that any competition will be eliminated. Those startups that
| are not posing a real threat don't count anyways.
|
| Hardware startups are not easy. If the effect is that the
| most likely way to make money is to be bought by the
| behemoth, then this distorts the market even more and
| suffocates innovation.
| 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
| ra7 wrote:
| Groq calls their inference chips "Language Processing
| Unit": https://groq.com/blog/the-groq-lpu-explained
| dandanua wrote:
| It's an AI blackhole
| https://www.youtube.com/watch?v=21e5GZF3yx0
| Imustaskforhelp wrote:
| I got recommended this and I will watch it today, thank you.
| One of the comments points out
|
| "They've literally told us that the plan is to get bailed out
| by the taxpayers"
|
| This reminded me of how I think what's gonna happen/ is
| already happening is that they become too big to fail and get
| bailed out and the burden/loss becomes of taxpayers
|
| So we are kind of living in a system which is reckless about
| finances/stability behind businesses where the system is such
| that all the profits are privatized but all the losses are
| shared/even funded by the average person
|
| Combine in a mix of corruption in any political party to
| begin with and I am wondering why we don't have yet another
| french revolution.
| bgwalter wrote:
| Trump Jr. entered at $7 billion. In the meantime Nvidia got
| permission to sell GPUs to China.
|
| All-In pundit Palihapitiya is invested in Groq as well. It is
| going well for friends of David Sacks.
| Aurornis wrote:
| Acquisition premium:
| https://www.investopedia.com/terms/a/acquisitionpremium.asp
|
| The acquisition price of a company usually comes at a premium
| to the last valuation. This applies even with publicly traded
| companies, which is why acquisition announcements cause stock
| prices to pop up to some number between the last trade price
| and the acquisition price, proportional to how much the market
| thinks the acquisition is likely to go through.
|
| The premium can make sense to the acquirer because the acquired
| company is worth more when combined with all of the assets and
| power (brand name, distribution, patents, trade secrets) of the
| acquiring company.
|
| This confuses a lot of people who think the valuation of a
| company is equivalent to the number that would be paid to
| acquire it at that instant, but it's not.
| frozenport wrote:
| Groq kept delivering so their valuation has effectively gone
| up.
|
| A year ago it wasn't clear if they'd stay competitive but it
| seems they are.
| 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.
| Imustaskforhelp wrote:
| That was impressive to see what you did there and the harsh
| reality that its true hits like a brick.
|
| Don't forget that those forks of VScode are gonna be bought
| by Nvidia or chatgpt (OpenAI which gets invested by Nvidia)
| and everything else
|
| Its all one large web connecting every investment and
| cross-investments and everything. The bubble image which
| got infamous recently is definitely popping up even more.
| Its crazy basically.
| Aurornis wrote:
| Acquisitions generally come in at a significantly higher
| price.
|
| Even in public markets, acquiring all the shares of a company
| will require an offer that is a significant step above the
| current trading price.
| 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.
| blitzar wrote:
| > Nvidia will no doubt sell custom Groq-like chips for
| inference now.
|
| For $0bn they could have sold an Nvidia-like chip for
| inference.
| 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?
| hmate9 wrote:
| There is also movement over of some key people to nvidia which
| is pretty significant: "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."
| lerchmo wrote:
| curious how the execs can honor the fiduciary duty to share
| holders assuming only they? get the 20 billion and the
| company is left headless and leaking all of its intellectual
| property to Nvidia?
| wmf wrote:
| Shareholders get the $20B so that's the fiduciary
| responsibility fully satisfied.
| davedunkin wrote:
| Non-exclusive licensing and hiring the team.
|
| > 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.
| 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".
| impulser_ wrote:
| They don't need to catch up. They just need to be good enough
| and fast as fuck. Vast majority of useful tasks of LLMs has
| nothing to do with how smart they are.
|
| GPT-5 models have been the most useless models out of any
| model released this year despite being SOTA, and it because
| it slow as fuck.
| nineteen999 wrote:
| Bullseye.
| dontwannahearit wrote:
| Confused. Is 'fuck' fast or slow? Or both at the same time?
| Is there a sort of quantum superposition of fuck?
| ThrowawayTestr wrote:
| It's an intensifier
| blackoil wrote:
| Wasn't that supposed to be 'ass'
| imcritic wrote:
| Then how would double intensifier look like?
| 867-5309 wrote:
| well, it's not slow as fuck! it's quick as lightning and
| speedy as hell
| aschobel wrote:
| For coding I don't use any of the previous gen models
| anymore.
|
| Ideally I would have both fast and SOTA; if I would have to
| pick one I'd go with SOTA.
|
| There a report by OpenRouter on what folks tend to pay for
| it; it generally is SOTA in the coding domain. Folks are
| still paying a premium for them today.
|
| There is a question if there is a bar where coding models
| are "good enough"; for myself I always want smarter / SOTA.
| wyre wrote:
| FWIW coding is one of the largest usages for LLM's where
| SOTA quality matters.
|
| I think the bar for when coding models are "good enough"
| will be a tradeoff between performance and price. I could
| be using Cerebras Code and saving $50 a month, but Opus
| 4.5 is fast enough and I value the piece-of-mind I have
| knowing it's quality is higher than Cerebras' open source
| models to spend the extra money. It might take a while
| for this gap to close, and what is considered "good
| enough" will be different for every developer, but
| certainly this gap cannot exist forever.
| nl wrote:
| GPT 5 Codex is great - the best coding model around except
| maybe for Opus.
|
| I'd like more speed but prefer more quality than more
| speed.
| Demiurge wrote:
| I get GPT 5.2 responses on copilot faster than for any
| other model, almost instantly. Are you sure they're slow as
| fuck?
| Aurornis wrote:
| > They don't need to catch up. They just need to be good
| enough
|
| The current SOTA models are impressive but still far from
| what I'd consider good enough to not be a constant exercise
| in frustration. When the SOTA models still have a long way
| to go, the open weights models have an even further gap
| distance to catch up.
| echelon wrote:
| This. You can distill a foundation model into open source.
| The Chinese will be doing this for us for a long time.
|
| We should be glad that the foundation model companies are
| stuck running on treadmills. Runaway success would be bad
| for everyone else in the market.
|
| Let them sweat.
| gejose wrote:
| > just need to be good enough and fast as fuck
|
| Hard disagree. There are very few scenarios where I'd pick
| speed (quantity) over intelligence (quality) for anything
| remotely to do with building systems.
| jameshush wrote:
| I agree with you for many use cases, but for the use case
| I'm focused on (Voice AI) speed is absolutely everything.
| Every millisecond counts for voice, and most voice use
| cases don't require anything close to "deep thinking.
| E.g., for inbound customer support use cases, we really
| just want the voice agent to be fast and follow the SOP.
| nkmnz wrote:
| If you have a SOP, most of the decision logic can be
| encoded and strictly enforced. There is zero intelligence
| involved in this process, it's just if/else. The key part
| is understanding the customer request and mapping it to
| the cases encoded in the SOP - and for that part,
| intelligence is absolutely required or your customers
| will not feel ,,supported" at all, but be better off with
| a simple form.
| jacquesm wrote:
| As a customer when confronted with such a system I hang
| up and never ever do business with that company again.
| Regardless of polish, they're useless.
| nkmnz wrote:
| What do you mean by "such a system"? One that uses AI to
| funnel your natural language request into their system of
| SOP? Or one that uses SOPs to handle cases in general?
| SOP are great, they drastically reduce errors, since the
| total error is the square root of the sum of squares of
| random error and bias - while bias still occurs, the
| random error can and should be reduced by SOPs, whenever
| possible. The problem is that SOPs can be really bad:
| "Wait, I will speak to my manager" -> probably bad SOP.
| "Wait, I will get my manager so that you can speak to
| them" -> might be a better SOP, depending on the
| circumstances.
| jacquesm wrote:
| It _never_ works. You always just get the digital
| equivalent of a runaround and there simply isn 't a human
| in the loop to take over when the AI botches it (again).
| So I gave up trying, this crap should not be deployed
| unless it works at least as good as a person. You can't
| force people to put up with junk implementations of
| otherwise good ideas in the hope that one day you'll get
| it right, _customer_ service should be a service because
| on the other end of the line is someone with a very high
| probability of being already dissatisfied with your
| company and /or your product. For me this is not
| negotiable, if my _time_ is less valuable to you, the
| company, than it is to actually put someone on to help
| then my _money_ will go somewhere else.
| nkmnz wrote:
| I'm still not sure if you're speaking of SOP in general
| or AI-interfaces to them. Why don't you answer that
| simple question before ranting on?
| gessha wrote:
| As long as the faster tech is reliable and I understand
| its quirks, I can work with it.
| ssivark wrote:
| If you thought a human working on something will benefit
| from being "agile" (building fast, shipping quickly,
| iterating, getting feedback, improving), why should it be
| any different from AI models?
|
| Implicit in your claim are specific assumptions about how
| expensive/untenable it is to build systemic guardrails
| and human feedback, and specific cost/benefit ratio of
| approximate goal attainment instead of perfect goal
| attainment. Rest assured that there is a whole portfolio
| of situations where different design points make most
| sense.
| nkmnz wrote:
| > why should it be any different from AI models?
|
| 1. law of diminishing returns - AI is already much, much
| faster at many tasks than humans, especially at spitting
| out text, so becoming even faster doesn't always make
| that much of a difference. 2. theory of constraints -
| throughput of a system is mostly limited by the ,,weakest
| link" or slowest part, which might not be the LLM, but
| some human-in-the-loop, which might be reduced only by
| smarter AI, not by faster AI. 3. Intelligence is an
| emergent property of a system, not a property of its
| parts - with other words: intelligent behaviour is
| created through interactions. More powerful LLMs enable
| new levels of interaction that are just not available
| with less capable models. You don't want to bring a
| knife, not even the quickest one in town, to a massive
| war of nukes.
| CuriouslyC wrote:
| Speed is great for UI iteration or any case where a human
| must be in the loop.
| AmazingTurtle wrote:
| I'd prefer a 30 minute response from GPT-5 over a 10 minute
| Response from {Claude/Google} <whatever their SOTA model
| is> (yes, even gemini 3)
|
| Reason is: while these models look promising in benchmarks
| and seem very capable at an affordable price, I *strongly*
| felt that OpenAI models perform better most of the times. I
| had to cleanup Gemini mess or Claude mess after vibe coding
| too much. OpenAI models are just much more reliable with
| large scale tasks, organizing, chomping tasks one by one
| etc. That takes its time but the results are 100% worth it.
| _fizz_buzz_ wrote:
| > their main trick for model improvement is distilling the
| SOTA models
|
| Could you elaborate? How is this done and what does this
| mean?
| MobiusHorizons wrote:
| I am by no means an expert, but I think it is a process
| that allows training LLMs from other LLMs without needing
| as much compute or nearly as much data as training from
| scratch. I think this was the thing deepseek pioneered.
| Don't quote me on any of that though.
| tickerticker wrote:
| Yes. They bounced millions of queries off of ChatGPT to
| teach/form/train their DeepSeek model. This bot-like
| querying was the "distillation."
| SirMaster wrote:
| Why would OpenAI allow someone to do that?
| MadnessASAP wrote:
| They didn't, but how do you stop it? Presuming the scale
| that OpenAI is running at?
| orbital-decay wrote:
| They definitely didn't. They demonstrated their stuff
| long before OAI and the models were nothing like each
| other.
| tensor wrote:
| No, distillation is far older than deepseek. Deepseek was
| impressive because of algorithmic improvements that
| allowed them to train a model of that size with vastly
| less compute than anyone expected, even using
| distillation.
|
| I also haven't seen any hard data on how much they do use
| distillation like techniques. They for sure used a bunch
| of synthetic generated data to get better at reasoning,
| something that is now commonplace.
| MobiusHorizons wrote:
| Thanks it seems I conflated.
| mistercheph wrote:
| Too bad, so sad for the Mister Krabs secret recipe-pilled
| labs. Shy of something fundamental changing, it will always
| be possible to make a distillation that is 98% as good as a
| frontier model for ~1% of the cost of training the SOTA
| model. Some technology just wants to be free :)
| blackoil wrote:
| We trust in our lord and savior China and Zuck to keep the
| peasants fed.
| __mharrison__ wrote:
| How does this work considering the Nemotron models?
| nl wrote:
| NVIDIA release some of the best open source models around.
|
| Almost all open source models are trained and mostly run on
| NVIDIA hardware.
|
| Open source is great for NVIDIA. They want more open source,
| not less.
|
| Commoditize your complement is business 101.
| impulser_ wrote:
| Then why are they spending $20 billion dollars to handicap an
| inference company that giving open source models a major
| advantage over closed source models?
| credit_guy wrote:
| > to handicap an inference company
|
| That's a non-charitable interpretation of what happened.
| The are not "spending $20 billion to handicap Groq". They
| are handing Groq $20 billion to do whatever they want with
| it. Groq can take this money and build more chips, do more
| R&D, hire more people. $20 billion is truly a lot of money.
| It's quite hard to "handicap" someone by giving them $20
| billion.
| wmf wrote:
| Groq doesn't have any employees. They can't do R&D
| because there's no one to do it. The $20B goes to Groq's
| investors.
| credit_guy wrote:
| From the article: > Groq added that it
| will continue as an "independent company," led by finance
| chief Simon Edwards as CEO.
|
| The $20B does not go to Groq's investors. It goes to
| Groq. You can say that Groq is owned by its investors,
| and this is the same thing, but it's not. In order for
| the money to go to the investors, Groq needs to disburse
| a dividend, or to buy back shares. There is no indication
| that this will happen. And what's more, the investors
| don't even need this to happen. I'm sure any investor
| that wants to sell their shares in Groq will now find
| plenty of buyers at a very advantageous price.
| wmf wrote:
| Let's bet on this shit. Where's the Polymarket.
| p1esk wrote:
| _they spending $20 billion dollars to handicap an inference
| company_
|
| Inference hardware company
| nl wrote:
| > handicap
|
| Your words.
|
| Because it's very good tech for inference?
|
| It doesn't even do training.
|
| And most inference providers for Open Source models use
| NVIDIA eg Fireworks, Basten, TogetherAI etc.
|
| Most NVIDIA sales go to training clusters. That is changing
| but it'd be an interesting strategy to differentiate the
| training and inference lines.
| gpapilion wrote:
| Realistically groq is a great solution but has near
| impossible requirements for deployment. Just look at how
| many adapters you need to meet the memory requirements of a
| small llm. SRAM is fast but small.
|
| I would guess their interconnect technology is what NVIDIA
| wants. You need something like 75 adapters for an 8b
| parameter model they had some really interesting tech to
| make the accelerator to accelerator communication work and
| scale. They were able to do that well before nvl 72 and
| they scale to hundreds of adapters since large models
| require more adapters still.
|
| We will know in a few months.
| ymck wrote:
| I'd say that it's probably not a play against open source, but
| more trying to remove/change the bottlenecks in the current
| chip production cycle. Nvidia likely doesn't care who wins,
| they just want to sell their chips. They literally can't make
| enough to meet current demand. If they split off the inference
| business (and now own one of the only purchasable alternatives)
| they can spin up more production.
|
| That said, it's completely anti-competitive. Nvidia could
| design a inference chip themselves, but instead the are locking
| down one of the only real independents. But... Nobody was
| saying Groq was making any real money. This might just be a
| rescue mission.
| ilaksh wrote:
| Yes, you are way off, because Groq doesn't make open source
| models. Groq makes innovative AI accelerator chips that are
| significantly faster than Nvidia's.
| zamalek wrote:
| > Groq makes innovative AI accelerator chips that are
| significantly faster than Nvidia's.
|
| Yeah I'm disappointed by this, this is clearly to move them
| out of the market. Still, that leaves a vacuum for someone
| else to fill. I was extremely impressed by Groq last I messed
| about with it, the inference speed was bonkers.
| wmf wrote:
| If it's that good Nvidia can just keep selling it.
| allovertheworld wrote:
| more like now Nvidia wants to release their own ASIC to
| combat google
| fragmede wrote:
| Umm... no one tell them, okay?
| LoganDark wrote:
| For inference, but yes. Many hundreds of tokens per second of
| output is the norm, in my experience. I don't recall the
| prompt processing figures but I think it was somewhere in the
| low hundreds of tokens per second (so slightly slower than
| inference).
| heavyset_go wrote:
| Nvidia just released their Nemotron models, and in my testing,
| they are the best performing models on low-end consumer
| hardware in both terms of speed and accuracy.
| ramoz wrote:
| They acquired in order to have an ASICs competitor to Google
| TPU.
| Kiboneu wrote:
| >Are they buying them to try and slow down open source models
|
| The opposite, I think.
|
| Why do you think that local models are a direct threat to
| Nvidia?
|
| Why would Nvidia let a few of their large customers have more
| leverage by not diversifying to consumers? Openai decided to
| eat into Nvidia's manufacturing supply by buying DRAM; that's
| concretely threatening behavior from one of Nvidia's larger
| customers.
|
| If Groq sells technology that allows for local models to be
| used better, why would that /not/ be a profit source for Nvidia
| to incorporate? Nvidia owes a lot of their success on the
| consumer market. This is a pattern in the history of computer
| tech development. Intel forgot this. AMD knows this. See where
| everyone is now.
|
| Besides, there are going to be more Groqs in the future. Is it
| worth spending ~20B for each of them to continue to choke-hold
| the consumer market? Nvidia can afford to look further.
|
| It'd be a lot harder to assume good faith if Openai ended up
| buying Groq. Maybe Nvidia knows this.
| deaux wrote:
| > Besides, there are going to be more Groqs in the future.
|
| And likely some of them are going to be in countries that
| won't let them sell out to Nvidia.
| vachina wrote:
| More like they're trying to snuff out potential competitors.
| Why work as hard to push your own products if NVIDIA gave you
| money to retire for the rest of your life?
| karmasimida wrote:
| With RAM/memory price this high, open source is not going to
| catch up with closed source.
|
| The open source economy relies on the wisdom of crowds. But
| that implies and equal access to experimentation platforms. The
| democratization of PC and consumer hardware brings the previous
| open source era that we all love, I am afraid the tech mongols
| had identified the chokehold of LLM ecosystem and found ways to
| successfully monopolized it
| PunchyHamster wrote:
| You still need hardware to run open source models. It might eat
| into OpenAI profit but I doubt it will eat into NVIDIA's
|
| If anything more companies in making models business the higher
| NVIDIA chip demand will be, till we get some proper competition
| at least. We badly need some open CUDA equivalent so moving off
| to competition isn't a problem
| HPsquared wrote:
| Nvidia's dream would be for everyone to buy a personal DGX
| H100 for private local inference. That's where open source
| could lead. Datacenters are much more efficient in their use
| of chips.
| xnx wrote:
| Exactly. Efficiency use of their chips is the enemy of
| Nvidia.
| dTal wrote:
| Doubt it:
|
| https://en.wikipedia.org/wiki/Jevons_paradox
| mr_toad wrote:
| The constant threat of open source (and other competitors) is
| what keeps the big fish from getting complacent. It's why
| they're spending trillions on new data centers, and that
| benefits Nvidia. When there's an arms-race on it's good to be
| an arms dealer.
| nbardy wrote:
| Your way off, this reads more like anti capitalist political
| rhetoric than real reasoning.
|
| Look at Nvidia nemotron series. They hav become a leading open
| source training lab themselves and they're releasing the best
| training data, training tooling, and models at this point.
| AmazingTurtle wrote:
| Show me an affordable open source coding model thats closet to
| GPT-5.2-codex capabilities. Note: I do not have tons of HBM
| lying around
| epolanski wrote:
| I don't see where is the benefit for Nvidia to limit the open
| source models.
|
| The more competition, the more shovels they sell.
|
| It's like saying that Intel would've benefited if only Dell and
| few others sold servers because they brought in multiple
| billions per year.
| jayanmn wrote:
| China may take over the open source part. That is the only
| country with exposure to hardware, software and political
| might.
| 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
| chermanowicz wrote:
| the rumor is sambanova-intel is akin to a firesale, so who
| knows what the real story with any single company
| 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.
| anonzzzies wrote:
| I thought the Skype deal back then was worse: it sucked balls
| back then already.
| twoodfin wrote:
| And now we're told that bet was such a sure thing that
| regulators should have blocked it!
| 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.
| aurareturn wrote:
| Groq is absolutely tiny. I don't think antitrust is an issue
| here.
| jeromegv wrote:
| 20 billions is tiny?
| neilellis wrote:
| Is nowadays
| derwiki wrote:
| WhatsApp was a tiny team
| aurareturn wrote:
| That's the sales price of the company. Their marketshare, I
| imagine, is absolutely miniscule.
| ignoramous wrote:
| Market share wise, Groq is perhaps "tiny"? Nvidia may be
| paying a premium for Groq [0] since it eliminates
| competition (at least on the inference side).
|
| [0] valued ~PS6.5bn 2mo ago
| https://www.reuters.com/business/groq-more-than-doubles-
| valu...
| nabla9 wrote:
| It's a non-exclusive deal.
|
| No reason for antitrust action whatsoever.
| siliconc0w wrote:
| It's a backdoor acquisition by looting the key talent.
| bilbo0s wrote:
| It's the opposite of an acquisition.
|
| It's literally:
|
| "I don't want you and your 200 tensorflow/pytorch monkeys.
| I just want your top scientist and I need a clever way to
| offer him a nine figure salary. Good of you to grant him so
| much stock and not options. Now I can just make a transfer
| to your shareholders, of which he is one! Awesome! Now I
| don't have to buy your company!"
|
| I'll give you bonus points if you can guess what happens to
| the worthless options all those TF/PyTorch monkeys are
| holding?
|
| Guys, seriously, be careful who you go to work for, because
| chances are, you are not the key scientist.
| danny_codes wrote:
| That's a loophole. Regulation hasn't caught up to the
| innovation of non-exclusive licensing deal. Hopefully we'll
| get some competence back in government soon-ish and can
| rectify the mistake
| nabla9 wrote:
| That's not a loophole. Non-exclusive licensing agreement is
| the opposite of loophole.
| zipy124 wrote:
| Non exclusive deal but also acquiring a lot of the staff,
| which seems pretty exclusive in that term.
| bilbo0s wrote:
| Yeah but that's going nowhere in court right?
|
| You can't have the government coming in telling a scientist
| who he has to work for. People are free to take jobs at
| whatever company they like.
|
| This is just a clever mechanism of paying that intellectual
| capital an amount of money so far outside the bounds of a
| normal salary that it borders on obscenity.
|
| All that said, I don't say anything when Jordan Love or
| Patrick Mahomes are paid hundreds of millions, so I need to
| learn to shut my mouth in this case as well. I just think
| it sucks for the regular employees. I guarantee they will
| lose their jobs over the next 24 months.
| frozenport wrote:
| >> if groq and cerebras combined
|
| There isn't to be shared between the two techs, Groq's hardware
| is a like a railgun that installs all the weights into the
| optimal location before firing off an inference. Cerebras
| computer engineering more convention requiring the same data
| movement that GPUs struggle with optimizing.
|
| Suspect Groq is complementary/superior to nvidia's GPUs, while
| it is unclear what Cerebras brings other then maybe some deals
| with TSMC.
| bubblethink wrote:
| They are both SRAM based solutions currently with the same
| benefits and pitfalls.
| monster_truck wrote:
| groq was targeting a part of the stack where cuda was weakest:
| guaranteed inference time at a lower cost per token at scale.
| This was in response to more than just goog's tpus, they were
| also one of the few realistic alternative paths oai had with
| those wafers.
| Daviey wrote:
| I got curious about how many wheelbarrows of cash $20bn actually
| is.
|
| Two ways to think about it: weight vs volume.
|
| By weight (assuming all $100 bills):
|
| $20,000,000,000 / $100 = 200,000,000 bills
|
| Each bill is roughly 1g, so total mass is ~200,000 kg
|
| A typical builder's wheelbarrow can take about 100 kg before it
| becomes unmanageable
|
| 200,000 kg total / 100 kg per wheelbarrow [?] 2,000 wheelbarrows
| (weight limit)
|
| By volume:
|
| A $100 bill is ~6.14" x 2.61" x 0.11 mm, which comes out to about
| 102 cm3 per bill
|
| 200,000,000 bills x 102 cm3 [?] 20,400 m3 of cash
|
| A standard wheelbarrow holds around 0.08 m3 (80 litres)
|
| 20,400 m3 total / 0.08 m3 per wheelbarrow [?] 255,000
| wheelbarrows (volume limit)
|
| So,
|
| About 2,000 wheelbarrows if you only care about weight
|
| About 255,000 wheelbarrows if you actually have to fit the cash
| in
|
| So the limiting factor isn't how heavy the money is; it's that
| the physical volume of the cash is absurd. At this scale, $20bn
| in $100s is effectively a warehouse, not a stack.
| ThrowawayTestr wrote:
| Your volume of a single bill is a bit off.
| SauntSolaire wrote:
| Something wrong about representing the weight of US dollars in
| metric units.
| versteegen wrote:
| Then what do you say to 6.14" x 2.61" x 0.11 mm = 102 cm3
| zaik wrote:
| They should have converted to Euros first.
| blitzar wrote:
| How many pounds is it? Whos on first?
| mr_toad wrote:
| > Something wrong about representing the weight of US dollars
| in metric units.
|
| The traditional unit of measure of truckloads of money is
| (drum roll) a dump truck. A large dump truck holds 16-20
| cubic yards.
|
| https://www.catdumptruck.com/standard-dump-truck-size-chart/
| sgerenser wrote:
| I think you're off by about a factor of 100 on the volume of a
| single bill. So both cases it's in the ballpark of 2000
| wheelbarrows.
| mkl wrote:
| I think your volume per bill should be 6.14 * 0.0254 * 2.61 *
| 0.0254 * 0.00011 [?] 1.137e-6 m3. That means about 227 m3 total
| volume, or about 2800 wheelbarrows.
| matwood wrote:
| The movie Blow had a scene about the logistics dealing with
| tons of cash. Even before thinking about laundering, it's a
| huge PITA.
| sam_goody wrote:
| A better way to think of it is: If you got a dollar a second
| for the next 63 years, you still would not have gotten $2B.
| anonzzzies wrote:
| I do not consider this good news; I had hopes Anthropic or so
| would buy them, not the main AI hardware people.
| moralestapia wrote:
| "2.7M Developers and Teams"
|
| So, about ~$1,000/each? Seems pricey, even assuming all of them
| still use it every week/month.
| skeptrune wrote:
| I hope non executives and founders get something for their
| equity.
| boroboro4 wrote:
| From the comment below:
|
| > 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.
|
| Makes it very hard not to think of this as a way to give money to
| the current administration. I know, this sounds conspiracy theory
| grade, but 20b is too much for groq.
| laidoffamazon wrote:
| It's not a conspiracy theory. It's basically a bribe to
| Chamath, Don Jr. and Sacks.
| slrainka wrote:
| The value of Groq comes from its excellent price-to-performance
| ratio. Its inferencing speeds are faster than those of H200s,
| and it has the lowest costs in the industry. When running
| similar batch jobs across different providers compared to Groq,
| the processing speed can sometimes be more than 10 times
| faster. These figures are important for developing practical
| applications for production use. It's common for me to run
| workloads in Groq that cost less than $100, while the same
| workload can approach $1,000 on Bedrock or Gemini. They have
| tuned a set of OS models that can now deliver a full
| application. The speeds have allowed me to offload a lot of the
| functionality from heuristics to straight-up LLMs.
| jauntywundrkind wrote:
| Will be interesting technically to see what develops from this.
| NVLink? Full CUDA feels maybe doubtful but who knows. Nvidia CUDA
| Tile feels like more of a maybe, their new much more explicit way
| of making workloads.
|
| This does feel a bit sad for sure, worrying whether this might
| hold Groq and innovation back. Reciprocally, perhaps kind of cool
| to see Groq get a massive funding boost and help from a very
| experienced chip making peer. It feels like an envious position
| somewhat, even with the long term consequences being so hazy.
| From the outside yes it looks like Nvidia solidifying their iron
| grasp over a market with very limited competitive suppliers, but
| this could help Groq, and maybe it's not on the terms we think we
| want right now, but could be very cool to see.
|
| I really hope some of the rest of the markets can see what's
| happening, broadly, with Nvidia forming partnerships all over the
| place. NVLink with Intel, NVLink with Amazon's Tritanium...
| there's much more to the ecosystem, but just connecting the chips
| smartly is a huge task, is core to inter-operation. And for all
| we've heard of CXL, UltraAccelerator Link (UALink) and
| UltraEthernet (UET) it feels like very few major players are
| taking it seriously enough to just integrate these new
| interconnects & make them awesome. They remain incredible
| expensive & not commonly used, lacking broad industry adoption,
| and reserved for very expensive systems: there's a huge
| existential risk here that (lack of) interconnect will destroy
| competitors ability to get their good chips well integrated and
| used. The rest of the market needs more clear alarm bells going
| off, and needs to be making sure good interconnect is available
| on way more chips, get it into everyone's hands ASAP not just big
| customers, so that adoption & Linux nerd type folks can start
| building stacks that open up the future. The market risks getting
| left behind, if NVLink is built in everywhere and the various
| other fabrics never become common-place.
| pinkmuffinere wrote:
| > Groq will continue to operate as an independent company with
| Simon Edwards stepping into the role of Chief Executive Officer.
|
| Kindof feel bad for Simon Edwards, lol. I wonder what the plan is
| for the future of Groq
| cavisne wrote:
| I would assume this is a very well paid position, and with
| basically nothing to do.
| lerchmo wrote:
| I would assume he is a fiduciary... I am curious what happens
| with investors here?
| porridgeraisin wrote:
| Probably nvidia will keep investing in random rounds groq
| will continue to raise.
| htrp wrote:
| He has to keep the company in business for 2 more years
| pinkmuffinere wrote:
| Are there consequences if he fails to do so?
| nl wrote:
| Given that Groq is basically the TPU spin out Google should have
| done years ago it shows what a valuable asset TPUs are in Google.
|
| Still this they should spin that out though!
| shwaj wrote:
| Groq is very different from TPUs. The difference in memory
| should be a big clue. (Groq using SRAM built into each compute
| unit, vs TPUs using HBM more similarly to GPUs)
| nl wrote:
| The founder created TPUs at Google.
|
| > Prior to founding Groq, Jonathan began what became Google's
| Tensor Processing Unit (TPU) as a 20% project where he
| designed and implemented the core elements of the first
| generation TPU chip.
| shwaj wrote:
| I know, so what? Very smart people might have more than one
| idea in their careers. He left to pursue one of those.
| FL33TW00D wrote:
| He did not "create" the TPU. He contributed to the creation
| of the TPU.
|
| There are 66 authors on the original TPU paper:
| https://dl.acm.org/doi/10.1145/3079856.3080246
| Imustaskforhelp wrote:
| I believe that this news kind of helps cerebras as groq and
| cerebras are the only two companies working extensively in this
| space
|
| I feel as if Nvidia is eating up even companies which I thought
| had genuine potential or anything related to AI industry whether
| profitable or not
|
| Nvidia's trying its best to take all major players and
| consolidate into one big entity from top to bottom.
|
| The problem with this approach imo is that long term, nvidia's
| stock is extremely overvalued and its still a bubble which will
| burst and it will take nvidia first and foremost.
|
| The issue is that when nvidia falls, it will take the whole
| literal industry from top to bottom, even those companies which I
| thought could survive an AI burst. Long term I feel like it will
| have really bad impacts if nvidia continues to gobble up every
| company.
|
| I am pretty sure that Nvidia might be looking at cerebras too and
| if they offer them a shit ton of money and cerebras gets bought.
| I genuinely believe that Nvidia has sort of invested in literally
| all pockets of any hardware related investment for AI. And when
| OpenAI is unable to pay Nvidia, I feel like it can all come
| crashing down since this whole cycle is only being possible via
| external investor money.
| ilaksh wrote:
| The last time I tested, I could swear they were doing some
| problematic quantization, because I was getting kind of random
| results with one or two models, which worked perfectly when I
| switched providers.
|
| It was really disappointing too because Cerebras does not provide
| any service reliability on their cheap plans. So I came to the
| conclusion that unless I could convince the client to set up an
| enterprise contract or something, we could not use either
| provider for low-latency, which we need for voice calls. I think
| for organizations that can afford a hefty contract that
| guarantees service levels, Groq and Cerebras especially are
| basically cheat codes for meeting latency requirements for voice.
| But that might not be an option for really small businesses..
| although maybe I am just not a good sales person.
| sanxiyn wrote:
| In my opinion, Groq's technical decisions are unsound in a normal
| world. But being HBM-free may have some merit in a world where
| HBM supply is constrained.
| almosthere wrote:
| Hopefully prices stay the same, I run my small apps on groq. I
| get good enough summarization and simple agents from gpt120b
| which is on 15 cents for a million input tks.
| indigodaddy wrote:
| Can you list any internet facing apps you have that use Groq?
| Looking into them myself because of the speed
| almosthere wrote:
| Still in development, but yes, the speed is absolutely nice.
| mattas wrote:
| Biggest surprise for me is that they chose to announce this on
| Christmas Eve.
|
| I'd love to have been in the room when that was decided. The big,
| exciting news doesn't typically get announced during a major
| holiday week.
| bgwalter wrote:
| They want the Trump Jr. and Chamath connections to be forgotten
| by the time the media and YouTubers get active again after New
| Year. It's a standard media tactic.
| dustbunny wrote:
| What's your angle on the Chamath link? Is Nvidia greasing
| Sack's favour through Chamath?
| tokioyoyo wrote:
| Honestly, it's basically an accepted fact that the best thing
| to do is just to never respond anything that media/people
| say. If you respond, the conversation will continue. If you
| just say nothing, they'll move on to the next topic, because
| everyone needs to keep their audience engaged. With no
| response, your audience isn't interested either, so you have
| to move onto something else.
| richardw wrote:
| This is smart as hell. I've long wondered how they'd combat
| ASIC's without diluting their own benefits. This gives them a bit
| more time to figure out the moats, which is useful because Groq
| was going places. This juices Groq's distribution, production,
| ability to access a wider range of skills where necessary.
|
| I expect China to want to compete with this. Simpler than full-
| blown Nvidia chips. Cue much cheaper and faster inference for
| all.
| dustbunny wrote:
| Congratulations to Chamath
| 7e wrote:
| For failing?
| kennethologist wrote:
| Big win for Chamath!
| justinai6 wrote:
| A few thoughts: [disclaimer - I don't know anything official at
| all just reading the same public info that has been officially
| shared - this is just a few thoughts from an outsider]
|
| - The deal structure matters, and we don't have enough details
| yet. - If the license fee is distributed to shareholders, it goes
| above the liquidation preference. Anyone with common stock or
| options can exercise and get paid out. - The company continuing
| forward--I see this as great. There are discussions about it
| becoming just a shell, but I don't think that's the case at all.
| This looks like an acqui-hire for a few top people and a
| licensing deal for an alternative hardware approach to inference.
|
| Let's say they keep $3-4B cash in the company. That's plenty to
| avoid another financing round and keep cranking on growth.
|
| Groq and Cerebras can keep adding speed to open models while
| giving Nvidia key IP they can integrate into their large data
| center buildouts.
|
| Also, on deal points I think could be interesting: would you
| negotiate this as a one-time payment license deal? I wouldn't.
| Maybe it's a hurdle, so it might take a while, but let's say
| Nvidia pushes massive investment to deploy this Groq hardware
| infrastructure integrated into their full stack... A. This could
| produce a nice royalty stream for the Groq company that still
| exists--benefiting all stakeholders. B. Use Nvidia's massive
| ability to deploy capital and hardware pipeline and add in
| another unit they can sell to their fat stakes customers and
| ultimately to cheapen and accelerate getting fast inference in
| the wild quickly.
|
| And lastly, if management is smart or clever with the
| distribution part of this deal, maybe they convert all stock to
| common and squash the liquidation preference in this move. so
| they might have a quite compelling cap table post deal. (again
| hopefully structured as a distribution vs buy out) but at least
| pref is gone.
|
| So employees exercise, get an exit, keep their stock--with
| investors already happy, liquidation preference gone, and
| potentially a well-capitalized future royalty stream coming from
| the largest market cap company in the world and the largest capex
| pipeline ever seen.
|
| I'd much rather own the actual shares (fewer handcuffs) and have
| plenty of cash to deploy in a very capex-heavy moment.
|
| It just seems like a win-win-win-win.
|
| Nvidia wins new fundamentally different IP can sell to there
| existing customers Groq employees and stakeholders win. The open
| models win (big). We as AI consumers win because of cheaper,
| faster inference.
|
| Common to what we all want to believe here, we're not really in a
| winner take all moment here. nvdia is just taking a
| disproportional amount because of lack of real suitable
| alternatives... The base will for sure widen and expand from
| where we are at now, but that doesn't mean that nvidia has to or
| is going or loose as part of it.
| supermatt wrote:
| Is there less regulatory oversight when purchasing assets instead
| of the company?
|
| The near exclusive global provider of AI chips purchasing the
| only serious competitors technology while quite spceficially
| describing it as "not an acquisition" seems a bit...
| supermatt wrote:
| Is there less regulatory oversight when purchasing assets instead
| of the company, or do Nvidia really believe the FTC/DOJ are that
| blind? (Or doesn't it matter in the current climate?)
|
| The near exclusive global provider of AI chips taking key
| employees from and "licensing" the technology of the only serious
| competitor while quite specifically describing it as "not
| acquiring Groq as a company" seems quite obviously anti-
| competitive, and quite clearly an attempt to frame it as not.
| mrdevlar wrote:
| American has not had functional anti-trust laws for the better
| part of the last 40 years. The current climate is just a peak.
| joelthelion wrote:
| What a disaster. Any little competition they have, they are going
| to buy out.
|
| The world needs much stronger anti trust laws.
| PunchyHamster wrote:
| the world needs ENFORCEMENT of existing ones. Laws don't help
| if government is complicit in the grift because AI is only
| thing propping up the GDP
| z3ratul163071 wrote:
| chamath made a killing
| fyrn_ wrote:
| Seems anticompetitive..
| Sayyidalijufri wrote:
| Someone say to me that Nvidia is not buying Groq; the deal is a
| non-exclusive licensing agreement for its inference technology
| with some team members joining Nvidia.
|
| and he gave me this link:
|
| https://groq.com/newsroom/groq-and-nvidia-enter-non-exclusiv...
|
| https://www.cnbc.com/2025/12/24/nvidia-buying-ai-chip-startu...
| woadwarrior01 wrote:
| Indeed, it seems to be an Inflection-AI[1] style acquihire of
| senior leadership and not an acquisition. MS also entered into
| a non-exclusive licensing agreement with what was left of
| Inflection AI after poaching its founders.
|
| [1]: https://en.wikipedia.org/wiki/Inflection_AI
| ryzvonusef wrote:
| people on twitter are calling it yet another acqui-hire.
| kodefreeze wrote:
| They raised at a ~6B round recently. I could have invested but
| missed the deadline :(
| gigatexal wrote:
| If we had a functioning government this wouldn't be legal
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