Nvidia Licenses Groq's LPU Tech in a Deal Reportedly Worth $20 Billion

The AI chip titan just embraced its rival. But this isn't a friendly handshake; it's a strategic power play that could reshape the market. Nvidia has struck a non-exclusive licensing agreement with its AI chip competitor Groq, and will hire its founder and other key employees in a stunning move.

A $20 Billion Handshake?

As part of the deal, Groq founder Jonathan Ross, president Sunny Madra, and other staff will join Nvidia. While Nvidia told TechCrunch this is not an acquisition of the company, CNBC reported that Nvidia is acquiring assets from Groq for a staggering $20 billion. If those numbers are accurate, this would be Nvidia's largest purchase ever.

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The Power of the LPU

So, why Groq? The startup has been making waves with a different kind of chip called an LPU (Language Processing Unit). Groq has claimed its LPU can run Large Language Models (LLMs) 10 times faster while using just one-tenth the energy of conventional hardware. Its CEO, Jonathan Ross, is a giant in the field, known for helping invent Google's TPU (Tensor Processing Unit).

Groq's growth has been explosive. The company raised $750 million at a $6.9 billion valuation back in September. It also said its technology now powers the AI apps of more than 2 million developers, a huge jump from about 356,000 last year.