Groq has raised $350 million in a round led by investment firm Disruptive, with planned participation from Nvidia, valuing the company at $3.5 billion as it continues transitioning from a chipmaker into a cloud provider for AI infrastructure. The new valuation marks a decline from the $6.9 billion Groq reached last September, before Nvidia hired founder and CEO Jonathan Ross and other key staff as part of a $20 billion licensing deal. A company spokesperson said the shift reflects a new valuation baseline rather than a traditional down round, marking Groq’s identity following the licensing agreement.
Originally focused on building proprietary chips called LPUs to compete with Nvidia in AI inference computing, Groq pivoted toward operating data centers powered by Nvidia hardware after losing much of its chip engineering team. The company raised $650 million in June to launch this transition and plans to expand capacity from 54 megawatts to more than 200 megawatts by 2027. Groq currently operates 13 data centers across North America, Europe, the Middle East, and Asia Pacific, serving more than 6 million developers and enterprise customers.
Alex Davis, Groq’s chairman and CEO of Disruptive, said the company aims to become a leading provider of AI inference infrastructure, predicting inference will become the largest segment of AI computing demand. Groq’s pivot places it alongside other Nvidia-backed neoclouds, including CoreWeave, Lambda, and Nebius, as investors continue evaluating the long-term profitability of infrastructure-heavy AI cloud businesses.
