> Today, Groq announced that it has entered into a non-exclusive licensing agreement with Nvidia for Groq’s inference technology. The agreement reflects a shared focus on expanding access to high-performance, low cost inference.

> As part of this agreement, Jonathan Ross, Groq’s Founder, Sunny Madra, Groq’s President, and other members of the Groq team will join Nvidia to help advance and scale the licensed technology.

> Groq will continue to operate as an independent company with Simon Edwards stepping into the role of Chief Executive Officer.

> GroqCloud will continue to operate without interruption.

It quite obvious that open source models are catching up to closed source models very fast they about 3-4 months behind right now, and yeah they are trained on Nvidia chips, but as the open source models become more usable, and closer to closed source models they will eat into Nvidia profit as these companies aren't spending tens of billion dollars on chips to train and run inference. These are smaller models trained on fewer GPUs and they are performing as good as the pervious OpenAI and Anthropic models.

So obviously open source models are a direct threat to Nvidia, and they only thing open source models struggle at is scaling inference and this is where Groq and Cerberus come into the picture as they provide the fastest inference for open source models that make them even more usable than SOTA models.

Maybe I'm way off on this.

I don't think it really helps Nvidia's competitive position. The serious competition to Nvidia is coming from Google's TPU, Amazon's Trainium, AMD's Instinct, and to a much lesser extent Intel's ARC.

Grow recent investors got back a 3x multiple and may now invest in one of Nvidia's other competitors instead.

The world needs much stronger anti trust laws.

NVIDIA isn't buying Groq.

It's a non exclusive deal for inference tech. Or am I reading it incorrectly?

Usually antitrust is for consumers, but here I think companies like Microsoft and AWS would be the biggest beneficiaries of having more AI chip competition.

The near exclusive global provider of AI chips taking key employees from and “licensing” the technology of the only serious competitor while quite specifically describing it as “not acquiring Groq as a company” seems quite obviously anti-competitive, and quite clearly an attempt to frame it as not.

and he gave me this link:

https://groq.com/newsroom/groq-and-nvidia-enter-non-exclusiv...

https://www.cnbc.com/2025/12/24/nvidia-buying-ai-chip-startu...

Can someone with better understanding dumb this down for me please?

I expect China to want to compete with this. Simpler than full-blown Nvidia chips. Cue much cheaper and faster inference for all.

I think it’s pretty obvious at this point that Nvidia’s architecture has reached scaling limits - the power demands of their latest chips has Microsoft investing in nuclear fusion. Similar to Intel in both the pre-Core days and their more recent chips, they need an actual new architecture to move forward. As sits, there’s no path to profitability for the buyers of these chips given the cost and capabilities of the current LLM architectures, and this is obvious enough that even Nvidia has to realize it’s existential for them.

If Groq’s architecture can actually change the economics of inference and training sufficient to bring the costs in line with the actual, not speculative, benefits of LLMs, this may not be a buy-and-kill for Nvidia but something closer to Apple’s acquisition of P.A. Semi, which made the A- and M- class chips possible.

(Mind you, in Intel’s case they had to have their clocks cleaned by AMD a couple times to get them to see, but I think we’re further past the point of diminishing returns with Nvidia - I think they’re far enough past when the economics turned against them that Reality is their competition now.)

The near exclusive global provider of AI chips purchasing the only serious competitors technology while quite spceficially describing it as “not an acquisition” seems a bit…

Still this they should spin that out though!

I’d love to have been in the room when that was decided. The big, exciting news doesn’t typically get announced during a major holiday week.

Kindof feel bad for Simon Edwards, lol. I wonder what the plan is for the future of Groq

I feel as if Nvidia is eating up even companies which I thought had genuine potential or anything related to AI industry whether profitable or not

Nvidia's trying its best to take all major players and consolidate into one big entity from top to bottom.

The problem with this approach imo is that long term, nvidia's stock is extremely overvalued and its still a bubble which will burst and it will take nvidia first and foremost.

The issue is that when nvidia falls, it will take the whole literal industry from top to bottom, even those companies which I thought could survive an AI burst. Long term I feel like it will have really bad impacts if nvidia continues to gobble up every company.

I am pretty sure that Nvidia might be looking at cerebras too and if they offer them a shit ton of money and cerebras gets bought. I genuinely believe that Nvidia has sort of invested in literally all pockets of any hardware related investment for AI. And when OpenAI is unable to pay Nvidia, I feel like it can all come crashing down since this whole cycle is only being possible via external investor money.

Will there be a truck full of paper money or not?

It was really disappointing too because Cerebras does not provide any service reliability on their cheap plans. So I came to the conclusion that unless I could convince the client to set up an enterprise contract or something, we could not use either provider for low-latency, which we need for voice calls. I think for organizations that can afford a hefty contract that guarantees service levels, Groq and Cerebras especially are basically cheat codes for meeting latency requirements for voice. But that might not be an option for really small businesses.. although maybe I am just not a good sales person.

Media said it was crazy back then, well I think this sounds a lot crazier but hindsight is 20/20.

So, about ~$1,000/each? Seems pricey, even assuming all of them still use it every week/month.

Graphcore

Tenstorrent

SambaNova

Rivos

> Groq raised $750 million at a valuation of about $6.9 billion three months ago. Investors in the round included Blackrock and Neuberger Berman, as well as Samsung, Cisco, Altimeter and 1789 Capital, where Donald Trump Jr. is a partner.

Makes it very hard not to think of this as a way to give money to the current administration. I know, this sounds conspiracy theory grade, but 20b is too much for groq.

I like the Wright Brothers, they called the first plain, "Flyer".

This does feel a bit sad for sure, worrying whether this might hold Groq and innovation back. Reciprocally, perhaps kind of cool to see Groq get a massive funding boost and help from a very experienced chip making peer. It feels like an envious position somewhat, even with the long term consequences being so hazy. From the outside yes it looks like Nvidia solidifying their iron grasp over a market with very limited competitive suppliers, but this could help Groq, and maybe it's not on the terms we think we want right now, but could be very cool to see.

I really hope some of the rest of the markets can see what's happening, broadly, with Nvidia forming partnerships all over the place. NVLink with Intel, NVLink with Amazon's Tritanium... there's much more to the ecosystem, but just connecting the chips smartly is a huge task, is core to inter-operation. And for all we've heard of CXL, UltraAccelerator Link (UALink) and UltraEthernet (UET) it feels like very few major players are taking it seriously enough to just integrate these new interconnects & make them awesome. They remain incredible expensive & not commonly used, lacking broad industry adoption, and reserved for very expensive systems: there's a huge existential risk here that (lack of) interconnect will destroy competitors ability to get their good chips well integrated and used. The rest of the market needs more clear alarm bells going off, and needs to be making sure good interconnect is available on way more chips, get it into everyone's hands ASAP not just big customers, so that adoption & Linux nerd type folks can start building stacks that open up the future. The market risks getting left behind, if NVLink is built in everywhere and the various other fabrics never become common-place.

Quite obvious that Groq would get acquired. [0]

[0] https://news.ycombinator.com/item?id=39438820

- The deal structure matters, and we don't have enough details yet. - If the license fee is distributed to shareholders, it goes above the liquidation preference. Anyone with common stock or options can exercise and get paid out. - The company continuing forward—I see this as great. There are discussions about it becoming just a shell, but I don't think that's the case at all. This looks like an acqui-hire for a few top people and a licensing deal for an alternative hardware approach to inference.

Let's say they keep $3–4B cash in the company. That's plenty to avoid another financing round and keep cranking on growth.

Groq and Cerebras can keep adding speed to open models while giving Nvidia key IP they can integrate into their large data center buildouts.

Also, on deal points I think could be interesting: would you negotiate this as a one-time payment license deal? I wouldn't. Maybe it's a hurdle, so it might take a while, but let's say Nvidia pushes massive investment to deploy this Groq hardware infrastructure integrated into their full stack… A. This could produce a nice royalty stream for the Groq company that still exists—benefiting all stakeholders. B. Use Nvidia's massive ability to deploy capital and hardware pipeline and add in another unit they can sell to their fat stakes customers and ultimately to cheapen and accelerate getting fast inference in the wild quickly.

And lastly, if management is smart or clever with the distribution part of this deal, maybe they convert all stock to common and squash the liquidation preference in this move. so they might have a quite compelling cap table post deal. (again hopefully structured as a distribution vs buy out) but at least pref is gone.

So employees exercise, get an exit, keep their stock—with investors already happy, liquidation preference gone, and potentially a well-capitalized future royalty stream coming from the largest market cap company in the world and the largest capex pipeline ever seen.

I'd much rather own the actual shares (fewer handcuffs) and have plenty of cash to deploy in a very capex-heavy moment.

It just seems like a win-win-win-win.

Nvidia wins new fundamentally different IP can sell to there existing customers Groq employees and stakeholders win. The open models win (big). We as AI consumers win because of cheaper, faster inference.

Common to what we all want to believe here, we’re not really in a winner take all moment here. nvdia is just taking a disproportional amount because of lack of real suitable alternatives… The base will for sure widen and expand from where we are at now, but that doesn’t mean that nvidia has to or is going or loose as part of it.

Wait, what? How is the cloud business supposed to run if Nvidia is acquiring the rights to the hardware?

A free market is a regulated market. Otherwise you will end up with monopolies and a dead market.

Two ways to think about it: weight vs volume.

By weight (assuming all $100 bills):

$20,000,000,000 / $100 = 200,000,000 bills

Each bill is roughly 1g, so total mass is ~200,000 kg

A typical builder’s wheelbarrow can take about 100 kg before it becomes unmanageable

200,000 kg total / 100 kg per wheelbarrow ≈ 2,000 wheelbarrows (weight limit)

By volume:

A $100 bill is ~6.14" × 2.61" × 0.11 mm, which comes out to about 102 cm³ per bill

200,000,000 bills × 102 cm³ ≈ 20,400 m³ of cash

A standard wheelbarrow holds around 0.08 m³ (80 litres)

20,400 m³ total / 0.08 m³ per wheelbarrow ≈ 255,000 wheelbarrows (volume limit)

So,

About 2,000 wheelbarrows if you only care about weight

About 255,000 wheelbarrows if you actually have to fit the cash in

So the limiting factor isn’t how heavy the money is; it’s that the physical volume of the cash is absurd. At this scale, $20bn in $100s is effectively a warehouse, not a stack.

AI Chip Startup Groq Raises $750M at $6.9B Valuation - https://news.ycombinator.com/item?id=45276985 - Sept 2025 (5 comments)

Groq Raises $640M to Meet Soaring Demand for Fast AI Inference - https://news.ycombinator.com/item?id=41162875 - Aug 2024 (34 comments)

AI chip startup Groq lands $640M to challenge Nvidia - https://news.ycombinator.com/item?id=41162463 - Aug 2024 (12 comments)

Groq CEO: 'We No Longer Sell Hardware' - https://news.ycombinator.com/item?id=39964590 - April 2024 (149 comments)