Groq raises $650M to rebuild after Nvidia's talent poach and IP deal

Groq, the AI chipmaker known for its language processing unit (LPU), has raised $650 million in a new funding round led by Disruptive and Infinitum. The raise comes roughly six months after Nvidia signed a non-exclusive licensing agreement for Groq's technology and hired away founder Jonathan Ross, president Sunny Madra, and other key employees. Groq's last valuation was $6.9 billion after a $750 million round in September. With Nvidia now owning the IP for LPUs and launching its own Groq 3 LPX inference hardware, Groq has pivoted its focus to its neocloud business, which was previously run by Madra after Groq acquired Definitive Intelligence in 2024. The neocloud now operates 13 data centers across North America, Europe, the Middle East, and APAC, serving over 5 million developers and thousands of AI companies, processing trillions of tokens each week.

To lead this pivot, Groq has hired several new executives: Alan Rice (ex-xAI, Meta, U.S. Navy) as COO, Sinclair Schuller as CTO, and Rakesh Malhotra as CPO — both former co-founders of Nuvalence and Apprenda. The company's success now hinges on how competitive its inference cloud can remain given that its core hardware IP is shared with Nvidia. However, inference demand is soaring, and similar near-sales have rebounded, like Scale AI after Meta's $14.3 billion deal. In the high-stakes AI game, Groq's rebuild is a bet on the neocloud market.