AI chipmaker Groq has successfully secured $650 million in a new funding round to scale its inference cloud business. This financial injection comes just six months after a high-profile deal with Nvidia, which saw the GPU giant sign a non-exclusive licensing agreement for Groq’s intellectual property while simultaneously hiring away key leadership, including founder and CEO Jonathan Ross and president Sunny Madra.
A Strategic Capital Injection
On Monday, Groq announced the $650 million raise, confirming industry reports. The round was spearheaded by Disruptive, a Dallas-based late-stage investment firm led by Groq chairman Alex Davis, alongside participation from the Fort Lauderdale-based hedge fund Infinitum. While the company did not disclose its new valuation, it was previously valued at $6.9 billion following a $750 million round in September.
The Post-Nvidia Landscape
The transition follows a turbulent period for the startup. Jonathan Ross, a former Google engineer who helped create the Tensor Processing Unit, co-founded Groq a decade ago alongside Doug Wightman. Following the Nvidia deal, Wightman stepped into the role of CEO. Because Nvidia now holds the IP for Groq’s language processing unit (LPU) technology, the GPU giant officially launched its own Nvidia Groq 3 LPX inference hardware system during its GTC event in March.
Pivoting to the Neocloud
In response to the shifting hardware landscape, Groq is pivoting its primary focus toward its neocloud business. This division, previously managed by Madra after Groq’s 2024 acquisition of his firm, Definitive Intelligence, has expanded rapidly. The company reports it now operates 13 data centers across North America, Europe, the Middle East, and APAC. Groq claims the platform currently serves over five million developers and thousands of AI companies, processing trillions of tokens on a weekly basis.
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Leadership Refresh
To support its new direction, Groq has aggressively recruited new executive talent. Alan Rice, a U.S. Navy veteran with experience at Meta and xAI, has joined the company as COO. Additionally, the company brought on an entrepreneurial duo: Sinclair Schuller as CTO and Rakesh Malhotra as CPO. The pair previously worked together at Apprenda and later co-founded Nuvalence, a software-engineering firm acquired by EY in 2024. Malhotra also brings a decade of experience from Microsoft’s cloud division.
The Future of Inference
Groq’s ability to remain competitive hinges on its inference cloud performance, despite having shared its core hardware IP with Nvidia. While the inference sector is currently experiencing massive VC investment and high demand, it is simultaneously facing intense innovation and market saturation. However, the company is looking to precedents like Scale AI; CEO Jason Droege noted in an interview with Forbes that his company rebounded significantly following a $14.3 billion “not-acqui-hire” deal with Meta. In the high-stakes world of AI, Groq is betting that its scale and cloud-first strategy will ensure long-term viability.
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