Nvidia’s $20 Billion Groq Acquisition Shatters Records in Cash Deal

Nvidia just dropped a cool $20 billion in cash. The target? Groq. The result? The chip giant's largest acquisition ever.

The Cash Play

No stock swaps, no complex financing—just straight cash. That $20 billion figure isn't just a number; it's a statement of liquidity and intent. It screams confidence in a way debt-fueled buyouts simply can't.

Why Groq?

This isn't about buying market share. It's a strategic land grab for specialized AI hardware talent and architecture. Groq's tech represents a potential paradigm shift—Nvidia isn't just investing in a company; it's investing in a future roadmap and neutralizing a potential rival in one move.

The Scale of Ambition

A $20 billion cash transaction redefines 'strategic acquisition.' It moves the goalposts for the entire semiconductor industry, signaling that the battle for AI supremacy will be fought with war chests, not just R&D budgets. Forget competing on specs—now you compete on balance sheets.

For the finance folks already calculating the ROI? Let's just say the only thing growing faster than AI model parameters might be the acquisition premiums in this sector. A bold, expensive bet on the next computing frontier—paid for upfront, no credit needed.

Groq raised billions before selling and left its cloud unit behind

Three months ago, Groq raised $750 million at a $6.9 billion valuation. That round had big names like Blackrock, Neuberger Berman, Samsung, Cisco, Altimeter, and 1789 Capital, where Donald TRUMP Jr. is a partner.

And now Nvidia is buying the entire company for nearly three times that valuation.

Groq is expected to inform its investors later today. But Davis said not everything is included. Nvidia is buying all of Groq’s assets, except for one thing; Groq Cloud, the company’s new cloud division. That’s staying behind and isn’t part of the purchase. The rest, though, is going under Nvidia’s belt.

Groq is aiming to hit $500 million in revenue this year, thanks to insane global demand for chips that power AI is real and growing.

Groq’s technology has apparently been helping companies speed up how fast AI models answer prompts and make decisions. That kind of tech is hot right now, and Nvidia clearly wanted in.

Founders came from Google, and Musk had something to say

Groq was founded by engineers who left Google, including CEO Jonathan Ross. He helped build Google’s Tensor Processing Unit (TPU), custom chips used by some companies instead of Nvidia’s chips.

Ross and Douglas Wightman, another ex-Google engineer, were listed in Groq’s first SEC filing in 2016 when they raised $10.3 million. Wightman worked at Google’s experimental lab, Google X.

Nvidia has been throwing money at the whole AI ecosystem lately. It invested in Cohere, a company building AI models, and Crusoe, which mixes AI with energy infrastructure. Nvidia also put more into CoreWeave, a cloud platform focused on AI that’s preparing for an IPO.

Back in September, Nvidia also said it wanted to invest up to $100 billion in OpenAI.

OpenAI, in return, WOULD have to use at least 10 gigawatts of Nvidia’s hardware. That deal still hasn’t been finalized. In the same month, Nvidia said it would invest $5 billion in Intel under a separate agreement.

Other chip startups have been moving too. Cerebras Systems, another company in the AI space, had planned to go public this year. But in October, it backed out after raising over $1 billion in private funding.

Meanwhile, Mr. Elon Musk, who owns AI startup xAI, posted on X that, “xAI will have more AI compute than everyone else combined in

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