"Nvidia paid $20 billion to non-exclusively license Groq's intellectual property, which includes its language processing units (LPUs) and accompanying software libraries. Groq's LPUs form the foundation of its high-performance inference-as-a-service offering, which it will keep and continue to operate without interruption after the deal closes. The arrangement is clearly engineered to avoid regulatory scrutiny. Nvidia isn't buying Groq, it's licensing its tech. Except... it's totally buying Groq."
"This summer, AI chip startup Groq raised $750 million at a valuation of $6.9 billion. Just three months later, Nvidia celebrated the holidays by dropping nearly three times that to license its technology and squirrel away its talent. In the days that followed, the armchair AI gurus of the web have been speculating wildly as to how Nvidia can justify spending $20 billion to get Groq's tech and people."
"Sure, Groq is technically sticking around as an independent company with Simon Edwards at the helm as its new CEO, but with much of its talent gone, it's hard to see how the chip startup survives long-term. The argument that Nvidia just wiped a competitor off the board therefore works. Whether that move was worth $20 billion is another matter, given it could provoke an antitrust lawsuit."
Nvidia paid $20 billion to non-exclusively license Groq's intellectual property, including language processing units (LPUs) and software libraries. Groq will continue operating its high-performance inference-as-a-service offering after the deal closes. Groq's CEO Jonathan Ross and president Sunny Madra are moving to Nvidia along with most engineering talent, leaving Simon Edwards as CEO of the remaining company. The deal structure avoids a direct acquisition label but the talent transfer effectively diminishes Groq as a competitor and could invite antitrust scrutiny. Speculated motives include acquiring SRAM-based LPU technology, securing foundry capacity, or eliminating competition.
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