The Beijing municipal government is offering subsidies to companies that buy Chinese-made artificial intelligence (AI) chips. Igor Omilaev on Unsplash
Groq, an artificial intelligence chip manufacturing startup, announced Monday that it has raised more than $600 million in its latest round of funding.
Groq said in a press release that it has raised $640 million in a new Series D funding round led by BlackRock Private Equity Partners, Cisco Investments, KDDI, Neuberger Berman, Samsung Catalyst Fund and Type One Ventures.
“The AI computing market is significant, and Groq’s vertically integrated solutions are well suited to capture this opportunity. We look forward to supporting Groq as it scales to meet demand and further accelerate its innovation,” Samir Menon, managing director at BlackRock, said in the release.
The funding is a major win for Groq, which initially hoped to raise $300 million at a slightly lower valuation. The latest round brings Groq’s total raised to more than $1 billion and values the company at $2.8 billion.
“We intend to provide the resources to enable anyone to build cutting-edge AI products, not just large tech companies,” said Jonathan Ross, CEO and founder of Groq. “Having secured twice the funding we needed, we now plan to significantly scale our talent density. Our team has enabled hundreds of thousands of developers to build on open models, and we’re hiring.”
How Could the Funding Round Affect Nvidia
The funding comes after Groq adapted Meta Platforms’ large language model, LLaMA, last year to run on its own chips instead of using Nvidia’s.
In addition to the funding, Groq has hired Meta chief AI scientist Yann LeCun as a technical advisor and Intel’s former foundry business head Stuart Pann as chief operating officer.
Groq’s successful financing will help it achieve its goal of deploying 180,000 LPU chips by the end of the first quarter of 2025. It may also help reduce the sky-high prices of AI chips in a market currently dominated by Nvidia. In fact, the company currently controls approximately 70% to 95% of the AI chip space, with a gross margin of nearly 80.