Nvidia has agreed to buy the assets of Groq, a designer of AI inference chips, for $20 billion in cash.
CNBC reported that Alex Davis, CEO of Disruptive, which led the startup’s latest financing round in September, confirmed that the deal is in place.
Davis’s firm has invested more than $500 million in Groq since the company was founded in 2016, said the deal came together quickly.
CNBC noted that 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.
Groq said in a blog post on Wednesday that it had “entered into a non-exclusive licensing agreement with Nvidia for Groq’s inference technology,” without disclosing a price.
With the deal, Groq founder and CEO Jonathan Ross along with Sunny Madra, the company’s president, and other senior leaders “will join Nvidia to help advance and scale the licensed technology,” CNBC said.
Groq added that it will continue as an “independent company,” led by finance chief Simon Edwards as CEO. Nvidia has not yet commented on the deal.
The deal is the biggest in Nvidia’s acquisition history. It’s not clear if Nvidia will face regulatory hurdles as it already has a commanding lead in AI chips, and this deal could further cement its leadership role. Nvidia previously paid $7 billion to acquire the networking chip firm Mellanox.
Update: Groq confirmed the deal, without saying the deal amount. Nvidia has taken a non-exclusive license to Groq’s IP and has hired engineering talent from Groq’s team to join Nvidia to provide world-leading accelerated computing technology. Nvidia has not acquired the company.