Nvidia recruits managers from its competitor Groq

Nvidia hired Groq co-founder and current CEO Jonathan Ross, as well as its president, Sunny Madra, “and other members of the team” as part of an agreement between the two companies.

The hiring of the executives comes as part of the non-exclusive licensing agreement with Nvidia for the use of Groq’s inference technology.

Inference in this field refers to the process by which trained AI models make predictions or generate answers, such as when ChatGPT answers a user’s questions.

Through its language processing units (LPUs), Groq has achieved greater energy efficiency from generative AI.

The announcement came minutes after the CNBC network cited an investor, who assured that the Californian start-up would be acquired for $20 billion.

When consulted by AFP, both companies declined to comment beyond Groq’s statement.

However, a source close to the negotiation told AFP that “Nvidia is not going to acquire Groq”, which contradicts the director of the investment capital firm Disruptive, Alex Davis, cited by CNBC.

Hiring executives, rather than making an acquisition, gives several advantages to companies like Nvidia and other Silicon Valley tech giants that go after employees of smaller companies.

Prevents there from being a veto by regulatory agents for monopoly reasons. On the other hand, It avoids substantial expenses for the repurchase of shares from investors as occurs in an acquisition.

In June, Meta used a similar procedure with Scale AI, specialized in data preparation for AI, buying only 49% of its capital and bringing in its then CEO, Alexandr Wang.