What does an AI company do after a rival pays investors a hefty IP licensing fee and poaches its critical talent — a so-called not-acqui-hire deal? For AI chipmaker Groq, the answer appears to be: raise more money, hire new talent, and pivot.
On Monday, Groq announced a $650 million funding round, confirming earlier reports. The raise comes roughly six months after Nvidia signed a non-exclusive licensing agreement for Groq’s technology and hired away founder and CEO Jonathan Ross, president Sunny Madra, and other key employees. Groq did not disclose its new valuation. It was last valued at $6.9 billion following a $750 million round in September 2025.
Ross, formerly at Google, was instrumental in creating Google’s Tensor Processing Unit (TPU). He co-founded Groq a decade ago with Doug Wightman, who stayed on after the Nvidia deal and became CEO. Groq developed a chip it called a language processing unit (LPU), designed for inference, and offered it as a cloud service or on-premises hardware cluster.
Now that Nvidia owns the LPU IP, the GPU giant announced its own hardware cluster, the Nvidia Groq 3 LPX inference system, at its GTC event in March 2026. In response, Groq has pivoted to its neocloud business. This business, previously led by Madra after Groq acquired his data analytics company Definitive Intelligence in 2024, has grown to 13 data centers across North America, Europe, the Middle East, and APAC. Groq claims it serves over five million developers and thousands of AI companies, processing trillions of tokens each week.
Groq has also been hiring replacement executives. Alan Rice joined as COO, previously at xAI and Meta, following a career in the U.S. Navy. The company also added Sinclair Schuller as CTO and Rakesh Malhotra as CPO. The duo previously worked together at Apprenda, an enterprise cloud software company; they later co-founded Nuvalence, a software-engineering firm acquired by EY in 2024. Malhotra previously spent a decade on Microsoft’s cloud products.
Whether Groq can succeed after nearly being sold depends on how competitive its inference cloud remains, now that key hardware IP is shared with Nvidia. Inference-related tech is experiencing tremendous demand — and VC investment — but also increasing innovation and competition. Still, others have survived similar deals. Scale AI’s CEO Jason Droege told Forbes that business rebounded after Meta’s $14.3 billion not-acqui-hire about a year ago, and the company is on track to do $1 billion in revenue. In the high-stakes AI game, anything seems possible.
via TechCrunch AI