NVIDIA to Acquire AI Chip Startup Groq for About $200 Million in Cash, Its Largest Acquisition

CNBC reported on December 25th that David Davis—CEO of high-performance AI accelerator chip designer Groq and head of Disruptive Company—revealed NVIDIA has agreed to acquire Groq for $20 billion in cash. Davis’s firm has invested over $500 million in Groq since the chipmaker’s 2016 founding, and he noted the deal was struck quickly. Groq plans to inform its investors about the transaction later Wednesday. The acquisition covers all of Groq’s assets, though its early-stage Groq Cloud business is excluded. This marks NVIDIA’s largest acquisition to date, topping its 2019 purchase of Israeli chip designer Mellanox for nearly $7 billion. Driven by skyrocketing demand for AI accelerator chips to power large language model inference, Groq is targeting $500 million in revenue this year.