AI News Feed
Market watch
LG UltraFine Evo 32U990A-S Hits Record-Low $1,099 on Amazon, TechRadar ReportsNewegg Labor Day Deal: 32GB Kingston Fury Beast DDR4-3200 Kit Nearly Half Price at $179.99 with CodeGalaxy Z Fold 8 inner screen corners reported with excessive giveHuawei unveils Mate XT 2 tri-fold with privacy-screen edition as Apple prepares folding iPhoneWall Street Analysts Recommend Nvidia, Uber and Marvell for Long-Term GrowthLenovo, AMD and Huawei Put Local Large-Model AI at Center of New Devices
LG UltraFine Evo 32U990A-S Hits Record-Low $1,099 on Amazon, TechRadar ReportsNewegg Labor Day Deal: 32GB Kingston Fury Beast DDR4-3200 Kit Nearly Half Price at $179.99 with CodeGalaxy Z Fold 8 inner screen corners reported with excessive giveHuawei unveils Mate XT 2 tri-fold with privacy-screen edition as Apple prepares folding iPhoneWall Street Analysts Recommend Nvidia, Uber and Marvell for Long-Term GrowthLenovo, AMD and Huawei Put Local Large-Model AI at Center of New Devices
AI Chips & Compute

Groq raises $350M in pivot from AI chips to neocloud, valuation drops to $3.5B

Groq raised $350M led by Disruptive with Nvidia participation, valuing it at $3.5B. The startup pivots from chipmaking to a neocloud operating Nvidia systems.

AI News Feed · 2026-08-18 06:36

That valuation is down from the $6.9 billion Groq was worth in September 2025, just months before Nvidia hired founder and CEO Jonathan Ross and other top talent as part of a $20 billion licensing deal. A spokesperson told TechCrunch that despite the lower figure, the company does not view it as a down round but as establishing a new valuation for the “post-Nvidia-licensing-deal version of Groq.”

Groq previously focused on building its own chips, called LPUs (language processing units), to compete with Nvidia on inference. After losing its star team, Groq shifted to operating as a cloud and data center provider running Nvidia systems. In June, the startup raised a $650 million round to kick off that transition, and it plans to scale its capacity from 54 megawatts to more than 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, enterprises, and AI-native companies. The company says the fresh funds will support customers seeking “medium and larger sized clusters of Nvidia accelerated computing for training and inference.”

Groq’s chairman and Disruptive CEO Alex Davis said in a statement: “We are building Groq into the world’s leading AI inference cloud. Inference will without a doubt become the largest and most critical layer of AI infrastructure.”

While inference demand is high, it remains an open question whether neoclouds can become profitable enough to justify their heavy investments. CoreWeave reported strong second-quarter revenue growth and recently signed major contracts with Meta and Anthropic, but investors remain concerned about its high capital expenditures, debt reliance, exposure to rapidly depreciating hardware, and ability to generate free cash flow.

Groq’s financials remain private. Its pivot puts it inside Nvidia’s AI infrastructure ecosystem, a position shared by other neoclouds such as CoreWeave, Lambda, and Nebius, which also rely on Nvidia GPUs and receive Nvidia investment. TechCrunch has reached out to Groq for additional comment.