NVIDIA has entered into a nonexclusive licensing agreement with AI-chip maker Groq, and will acquire some of the startup’s executive team.
Nvidia’s stock rose 2% in Friday trading.
In a blog post on Wednesday, Groq said founder and CEO Jonathan Ross, President Sunny Madra and other personnel will be joining Nvidia “to help advance and scale” the licensed inference technology. “The agreement reflects a shared focus on expanding access to high-performance, low-cost inference,” Groq said.
Earlier, CNBC had reported Nvidia was buying Groq outright for about $20 billion, citing Alex Davis, CEO of investment firm Disruptive, which led Groq’s most recent funding round.
But that report appeared to be overstating the deal. Groq said it will remain an independent company, GroqCloud will continue to operate as usual and that CFO Simone Edwards will become its new CEO. When asked to comment on the apparent mix-up, a Groq spokesperson referred to the company’s blog post, which they said “includes the factual terms of the agreement.”
An Nvidia spokesperson referred to the details of Groq’s blog post as well.
Disruptive did not immediately respond to a request for comment.
Bernstein analysts, led by Stacy Rasgon, said in a note Wednesday night that the deal appears to be “strategic in nature” for Nvidia. “The company is already the clear leader in AI training, but inference workloads are more diversified and (it could be argued) may open up new areas for competition. Hence spending money (even $20B) to fill in new capabilities and further extend and cement an already massively leading position as inference scales seems reasonable to us.”