Groq Raises $350M at Half Its Prior Valuation as It Pivots From Chips to Nvidia-Powered Cloud

The AI chip startup gutted by Nvidia's $20B talent grab closes a $350M Series A led by Disruptive, reinventing itself as an Nvidia-powered inference cloud.

Groq, the startup that once positioned itself as Nvidia's fiercest challenger in AI inference chips, has closed a $350 million Series A — at a $3.5 billion valuation, roughly half the $6.9 billion it commanded last September.

The round was led by investment firm Disruptive, with planned participation from Nvidia itself. It caps a sharp reversal: late last year Nvidia hired founder and CEO Jonathan Ross and other top talent in a $20 billion licensing deal, gutting Groq's chip ambitions. The company has since pivoted from building its own LPU chips to operating Nvidia-powered infrastructure — a "neocloud."

Groq doesn't frame the lower price as a down round, telling TechCrunch the new number values the "post-Nvidia-licensing-deal version" of the company. Combined with $650 million raised in June, Groq has now pulled in $1 billion this year. It runs 13 data centers across North America, Europe, the Middle East, and Asia Pacific, serves more than six million developers, and plans to scale from 54 megawatts to more than 200 megawatts by 2027.

Whether neoclouds can turn heavy capex into profit remains an open question — CoreWeave's debt-heavy expansion is a standing cautionary tale. But Groq executive chairman Alex Davis is unbowed: "Inference will without a doubt become the largest and most critical layer of AI infrastructure."

Sources: TechCrunch, Groq