AI startup Groq has raised $350 million in a funding round led by investment firm Disruptive, with planned participation from Nvidia, as it continues its transition from an AI chipmaker to a neocloud provider offering high-performance GPU and AI infrastructure services.
The round values Groq at $3.5 billion, down from the $6.9 billion valuation it achieved in September 2025. That valuation preceded a significant shake-up: in late 2025, Nvidia hired Groq's founder and CEO Jonathan Ross and other top talent under a licensing agreement. A company spokesperson told TechCrunch that Groq does not view this as a down round, but rather as establishing a fresh valuation for the "post-Nvidia-licensing-deal version of Groq."
Groq originally focused on developing its own chips, called LPUs (Language Processing Units), to challenge Nvidia in inference—the real-time compute needed to run AI workloads. After losing its founding team, the company pivoted from a pure chipmaker to a cloud and data center operator running Nvidia systems, effectively becoming a customer of its former rival. In June, Groq raised $650 million to kick off this transformation and aims to scale its infrastructure from 54 megawatts to over 200 megawatts by 2027.
Today, Groq operates 13 data centers across North America, Europe, the Middle East, and Asia Pacific, serving more than 6 million developers and enterprises. The new funding will support customers "seeking usage of medium and larger sized clusters of Nvidia accelerated computing for training and inference," according to the company. "We are building Groq into the world's leading AI inference cloud," said Alex Davis, Groq's chairman and CEO of Disruptive, in a statement. "Inference will without a doubt become the largest and most critical layer of AI infrastructure."
While inference demand is soaring as enterprises scale AI workloads, the long-term profitability of neoclouds remains uncertain. CoreWeave reported strong second-quarter revenue growth and secured major contracts with Meta and Anthropic, yet investors remain wary of its heavy debt load and reliance on rapidly depreciating hardware. Groq's financials are still private, but its pivot places it squarely within Nvidia's AI infrastructure ecosystem—a common position among neoclouds. Nvidia supplies GPUs to CoreWeave, Lambda, and Nebius, while also investing billions in these companies as they race to expand capacity.
TechCrunch has reached out to Groq for further comment.
via TechCrunch AI