Nvidia’s biggest deal

According to Alex Davis, CEO of consulting firm Disruptive, Nvidia has reached an agreement to acquire assets from Groq – a company that designs high-performance AI accelerator chips. Nvidia will own all of Groq’s assets except the cloud computing segment. This person emphasized that “the deal is being completed quickly”.

In September, Disruptive led the capital round in Groq, investing half a billion USD. At that time, the startup founded in 2016 raised more than 750 million USD and was valued at 6.9 billion USD. Other investment partners include Blackrock, Neuberger Berman, Samsung, Cisco, Altimeter and 1789 Capital.

On December 24, Groq announced on its blog that it had “signed an agreement allowing Nvidia to exclusively use inference technology”, but did not disclose the value of the deal. According to the agreement, founder and CEO Jonathan Ross, President Sunny Madras and other senior leaders “will join Nvidia to help develop and expand licensed technology.”

However, in the next announcement, Groq emphasized that it “still operates as an independent company”. Chief Financial Officer Simon Edwards will replace Ross as CEO.

Theo CNBCat $20 billion, this is Nvidia’s largest acquisition. The previous largest acquisition, worth nearly $7 billion, took place in 2019 with Israeli chip design company Mellanox.

In an email Nvidia CEO Jensen Huang sent to employees CNBC collected, the deal will expand the company’s capabilities. They plan to “integrate Groq’s low-latency processors into Nvidia’s chip AI architecture, expanding the platform to serve an even wider range of real-time processing and artificial intelligence inference tasks.”

According to him, Nvidia is adding talented employees to its team and is allowed to use Groq’s intellectual property, but “is not acquiring Groq as a company.”

Nvidia has not yet commented.

In addition to acquisitions, Nvidia is also increasing its investments in chip startups as its cash sources become increasingly abundant. In September, the company announced it would invest $100 billion in OpenAI, as well as spend $5 billion on Intel.