SAN FRANCISCO, Dec 24 (GeokHub) Nvidia has struck a deal to license artificial intelligence chip technology from startup Groq and bring its founder and senior executives into the company, underscoring the chipmaker’s push to defend its dominance as the AI industry shifts toward inference workloads.
Groq confirmed in a blog post that Nvidia will receive a non-exclusive license to its technology and that Groq founder and CEO Jonathan Ross, a former Google engineer who helped build Alphabet’s AI chip program, will join Nvidia alongside Groq President Sunny Madra and other members of the engineering team. A source close to Nvidia confirmed the agreement.
The deal stops short of a formal acquisition, reflecting a familiar pattern in Silicon Valley in which major technology firms secure startup innovation and leadership through licensing and hiring arrangements rather than outright takeovers.
Groq did not disclose the financial terms. CNBC earlier reported that Nvidia was in talks to acquire Groq for about $20 billion, but neither company confirmed that report. Groq said it will continue operating independently, with Simon Edwards appointed as chief executive, and its cloud services business will remain active.
Battle Shifts to AI Inference
While Nvidia dominates chips used to train large AI models, it faces intensifying competition in inference — the process of running trained models to respond to user queries. Rivals include Advanced Micro Devices as well as startups such as Groq and Cerebras Systems.
Groq focuses on inference chips that rely on on-chip SRAM memory, avoiding the high-bandwidth memory shortages affecting the global semiconductor industry. The design allows for faster responses in chatbots and AI services, though it limits the size of models that can be deployed.
Cerebras, Groq’s main rival in this approach, is preparing for a potential public listing as early as next year, according to earlier Reuters reporting. Both firms have secured large commercial contracts in the Middle East.
Regulatory Scrutiny Looms
The Nvidia-Groq agreement mirrors recent deals across the tech sector. Microsoft, Meta and Amazon have all used licensing or talent-hire structures to absorb AI leadership without acquiring entire companies — deals that have drawn growing scrutiny from regulators concerned about competition.
“Antitrust would seem to be the primary risk here,” Bernstein analyst Stacy Rasgon said in a note, adding that structuring the deal as a non-exclusive license helps preserve the appearance of competition, even as Groq’s leadership migrates to Nvidia.
Rasgon also noted Nvidia CEO Jensen Huang’s strong relationship with the Trump administration, which could prove relevant as regulators assess the deal.
Groq’s Rapid Rise
Groq’s valuation more than doubled to $6.9 billion following a $750 million funding round in September, up from $2.8 billion a year earlier. The company has positioned itself as a leading alternative to Nvidia in inference-focused AI hardware.
Huang has repeatedly argued that Nvidia will maintain its lead even as AI workloads increasingly shift from training to inference — a claim he reinforced during his flagship keynote earlier this year.
