AI chipmaker Groq has raised $650 million in new funding, confirming earlier reports, as the company pivots its business toward a cloud-based inference service. The funding round was led by Disruptive and Infinitum, with existing investors also participating. Groq did not disclose its new valuation, but it was last valued at $6.9 billion after a $750 million round in September.
The fresh capital comes six months after a landmark $20 billion non-exclusive licensing agreement with Nvidia that saw the GPU giant acquire Groq’s language processing unit (LPU) intellectual property and simultaneously hire away co‑founder and CEO Jonathan Ross, president Sunny Madra, and several other key employees. Ross, a former Google engineer who helped create the Tensor Processing Unit, co‑founded Groq a decade ago. Co‑founder Doug Wightman stayed on as CEO after the deal.
Now with its core chip IP shared with Nvidia, Groq is concentrating on its neocloud business — a cloud platform that runs AI inference workloads. Originally built by Madra after Groq acquired AI data analytics company Definitive Intelligence in 2024, the neocloud now spans 13 data centers across North America, Europe, the Middle East, and Asia-Pacific. It serves over five million developers and thousands of AI companies, processing trillions of tokens each week. The new funding will support deployment of the latest inference hardware, including Nvidia’s LPX systems based on the licensed LPU technology, with a goal of reaching 200 megawatts of capacity by 2027.
To rebuild its executive ranks, Groq has appointed Alan Rice (formerly of xAI and Meta) as chief operating officer, while Sinclair Schuller joins as CTO and Rakesh Malhotra as CPO. Schuller and Malhotra previously co‑founded Nuvalence, a software engineering firm acquired by EY. The company is betting that inference — running trained AI models — will become a far larger market than training. “We believe inference will become the largest infrastructure market in technology,” said board member John Yetimoglu of Infinitum. “As AI moves from experimentation to production, demand for reliable, cost‑efficient inference will continue to grow exponentially.”
The big question remains whether Groq’s inference cloud can differentiate itself now that its former core technology is a competitor’s product. For now, investor confidence is evident, but the AI inference landscape is evolving rapidly.
