On Wednesday, AI chip developer Groq announced it had secured a new $750 million investment, pushing its post-investment valuation to $6.9 billion.
This figure exceeded earlier speculation that emerged in July, when rumors circulated about Groq’s fundraising efforts. At that point, sources indicated the raise would be around $600 million, with the company valued near $6 billion.
Groq, which offers computing resources for data centers, previously brought in $640 million in August 2024 at a $2.8 billion valuation. This latest round more than doubles its valuation in just one year. According to PitchBook, Groq’s total funding now exceeds $3 billion.
The company has attracted significant attention as it seeks to loosen Nvidia's dominance in the AI chip sector. Unlike the typical GPUs, or graphics processing units, that drive most AI platforms, Groq’s hardware—called LPUs, or language processing units—acts as an inference engine, designed specifically to execute AI models swiftly and effectively.
Geared towards both enterprise clients and developers, Groq’s technology is accessible via the cloud or as local hardware clusters. The on-site option consists of server racks equipped with the company’s integrated hardware and software nodes. Both deployment types are capable of running open-source versions of leading AI models from companies such as Meta, DeepSeek, Qwen, Mistral, Google, and OpenAI. Groq claims its solutions can match or even enhance AI performance, all while significantly cutting costs compared to other options.
Jonathan Ross, Groq’s founder, brings extensive relevant experience to the table. He previously worked at Google, where he contributed to the development of the Tensor Processing Unit (TPU)—chips tailored for machine learning applications. Google revealed the TPU in 2016, the year Groq emerged from stealth mode. To this day, TPUs are integral to Google Cloud’s AI offerings.
Groq reports that its technology now supports AI applications for more than 2 million developers, a significant jump from 356,000 developers a year ago when the company last updated TechCrunch.
The latest funding round was spearheaded by Disruptive, with participation from BlackRock, Neuberger Berman, Deutsche Telekom Capital Partners, and other contributors. Previous backers—Samsung, Cisco, D1, and Altimeter—also took part in this round.
