Nvidia Makes Record $20 Billion All-Cash Move To Buy AI Chip Startup Groq, Deal Backed By Trump Jr – Here’s What It Means

Nvidia: Nvidia has struck its largest deal to date, agreeing to spend $20 billion in an all-cash transaction to acquire key assets from artificial intelligence startup Groq, marking a major escalation in the chipmaker’s AI expansion strategy, according to the reports. The deal eclipses Nvidia’s 2019 purchase of Israeli chip designer Mellanox for just under $7 billion, which had previously stood as its biggest acquisition.

Under the agreement, Nvidia will acquire all of Groq’s assets except its cloud business, which the startup said will continue to operate independently and without disruption.

What Nvidia Is Acquiring From Groq

In a blog post, Groq said Nvidia will take ownership of its AI inference technology, a critical area for deploying large language models efficiently. The two companies have also entered into a non-exclusive licensing agreement, allowing Groq to continue using the technology.

While Nvidia did not disclose the financial terms publicly, Groq confirmed that its GroqCloud platform is excluded from the deal and will remain operational.

Groq founder and CEO Jonathan Ross, president Sunny Madra, and several senior executives will join Nvidia to help scale and advance the licensed technology, the company said.

Deal Follows Recent $750 Million Fundraising

The acquisition comes just three months after Groq raised $750 million at a valuation of about $6.9 billion, with backing from investors including BlackRock, Neuberger Berman, Cisco, Samsung, Altimeter, and 1789 Capital, where Donald Trump Jr. is a partner.

Investor Alexis Davis, who led Groq’s latest funding round and has invested roughly $500 million in the company since its founding in 2016, told CNBC the deal was finalised quickly. He confirmed Nvidia is buying everything except Groq’s cloud business.

Despite the asset sale, Groq said it will continue operating as an independent company, with chief financial officer Simon Edwards stepping in as CEO.

Why Nvidia Wants Groq’s Technology

According to an internal email from Nvidia CEO Jensen Huang, the acquisition will strengthen Nvidia’s AI infrastructure offerings.

“We plan to integrate Groq’s low-latency processors into the NVIDIA AI factory architecture, extending the platform to serve an even broader range of AI inference and real-time workloads,” Huang wrote.

He also clarified that Nvidia is not acquiring Groq as a company, but selectively absorbing its technology and talent.

The deal underscores Nvidia’s financial firepower. As of October, the company held $60.6 billion in cash and short-term investments, sharply higher than about $13 billion in 2023. Other tech giants, including Google, Meta and Amazon, have recently pursued similar licensing-led acquisitions to secure AI talent and proprietary technology.

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