After Nvidia’s $20B not-acqui-hire, AI chip startup Groq reportedly raising $650M

Groq sources are looking to raise $650 million in new financing from existing investors Axioswhile leaning on its neocloud business that relies on its own AI chip and systems.

In December, Groq entered into one of those non-acquisition deals with Nvidia a reported $20 billionwhich entailed the departure of several top-level senior Groq employees to the chip giant and the licensing of Groq’s hardware technology to Nvidia. That deal was good news for the startup’s investors, who were paid in cash with what would have been Nvidia’s largest purchase if the deal was a full acquisition, Axios reports.

Now these investors have been asked to support the company’s plans to expand its inference cloud business, which allows developers and enterprises to host their inference-hungry apps. Inference is the processing that takes place after an AI prompt and is currently a much greater need in the AI ​​world than model training.

The new direction is currently led by Groq’s interim CEO and CFO, Adam Winter and Matt Eng, respectively.

In some ways, the $650 million in funding is guaranteed. Axios reports that Groq’s backers, Disruptive and Infinitium, have agreed to fill the round if other existing investors don’t want their pro-rata shares.