After hiring Nvidia for $20 billion, AI chip startup Groq has reportedly raised $650 million

Groq is looking to raise $650 million in new funding from existing investors, sources told Axios, as it leans into its new inferences business that relies on homegrown AI chips and systems.

In December, Groq entered into one of its non-takeover agreements with Nvidia for $20 billion, which included the departure of some of Groq’s senior employees to the chip giant and the licensing of Groq’s hardware technology to Nvidia. The deal was good news for the startup’s investors who got paid in cash in what would have been Nvidia’s largest purchase, if the deal was a full takeover, Axios reports.

Now, those investors have been asked to back and support the company’s plans to grow its inference cloud business, which allows developers and enterprises to host their own inference-hungry applications. Inference is the processing that occurs after an AI prompt and is currently a much greater need in the AI ​​world than model training.

The new direction is now being led by Groq’s interim CEO and CFO, Adam Winter and Matt Eng, respectively.

In some ways, the $650 million in financing is guaranteed. Axios reported that Groq’s backers, Disruptive and Infinitium, have agreed to fill the round if other existing investors do not want to acquire their pro rata shares.