AI Chip Startup Groq Hits $2.8 Billion Valuation After New Funding Boost

Groq is a semiconductor startup that makes AI inference chips. It recently raised $640 million in Series D funding, which raised its valuation to $2.8 billion and made it a major competitor to Nvidia in the AI chip market.

On Monday, Cisco Investments, the Samsung Catalyst Fund, BlackRock Private Equity Partners, and others led a $640 million Series D funding round for semiconductor startup Groq. The company’s value soared to $2.8 billion.  An engineer who previously worked at Alphabet founded the Silicon Valley company. AI inference chips, a type of semiconductor that enhances speed and adheres to the instructions of trained models, are its main product.

Along with large companies like Advanced Micro Devices, many startups, such as Groq, have been trying to chip away at Nvidia‘s lead in the rapidly growing AI chip market. Groq changed Meta Platforms’ LLaMA large language model so that it could run on its chips instead of Nvidia’s last year. To build LLaMA, Meta researchers used Nvidia chips.

Cloud service providers rushing to make AI products are also looking for alternatives to Nvidia’s most advanced processors, which are scarce. After receiving funding from Tiger Global Management and D1 Capital in 2021, it was worth $1.1 billion to Groq.

The company said about the latest round of funding, “Groq will use the funding to add new models and features to the GroqCloud and increase the capacity of its tokens-as-a-service (TaaS) offering.” By the end of the first quarter of 2025, Groq will have used more than 108,000 language processing units made by Global Foundries.

Groq has named Stuart Pann, a former senior executive at Intel and HP Inc., as its chief operating officer. Yann LeCun, chief AI scientist at Meta, has been named Groq’s new technical adviser.