Valuation of AI chipmaking startup Groq soars to $2.8B after funding round

AI chip startup Groq confirmed on Monday it has raised $640 million in a funding round with participation led by BlackRock, Cisco, and Samsung Catalyst Fund. 

The backing has catapulted Groq’s valuation to $2.8 billion, more than double its last valuation of $1.1 billion, back in 2021.

This development is being portrayed as a challenge to Nvidia at the top end of advanced semiconductor manufacturing, to take a bigger slice of the pie away from the market leader. Other challengers such as AMD are competing in the evolving race, as more cloud service providers and social media platforms strive to produce their own products to reduce reliance on Nvidia and lessen their dominance in chip making. 

As the funding was announced the company stated, “Groq will use the funding to scale the capacity of its tokens-as-a-service (TaaS) offering and add new models and features to the GroqCloud.”

Groq specializes in AI ‘inference’ chips

Groq is not to be confused with Elon Musk’s Grok AI venture. After the current X and Tesla mogul distanced himself from OpenAI to concentrate on plans of his own, he announced the arrival of Grok late last year, designed to rival OpenAI’s ChatGPT.

Groq trademarked its name during its fledgling stage in 2016, so it was no surprise they sent a cease-and-desist letter to the outspoken billionaire over his decision to name his company with such similar branding.

Both entities are claiming the sci-fi-based term as their own but Groq issued a spiky, irreverent statement, directly aimed at you-know-who, while platforming the impressive, breakneck credentials of their AI model.

Groq is now pressing ahead with the development of its chips, required to boost the capacity of AI systems. The Silicon Valley-based firm has its language processing unit (LPU) designed for AI ‘inference’, which is the process of a model using the data it was trained with to provide output to queries.

The company is set to utilize more than 108,000 LPUs by the end of March next year.

Groq also announced the appointment of Stuart Pann as Chief Operating Officer, following on from his time as a senior executive at Intel, and HP. He will be joined by Meta’s top AI scientist Yann LeCun, who comes on board as a technical adviser.

Image credit: Via Ideogram

The post Valuation of AI chipmaking startup Groq soars to $2.8B after funding round appeared first on ReadWrite.