It has been reported that Groq, a challenger to Nvidia in the development of chips for artificial intelligence, is set to be valued at $2.5 billion in a new funding round led by Blackrock. While the specific valuation and lead investor had not been previously reported, sources say that the deal will more than double Groq’s previous valuation when they raised $300 million in a round led by Tiger Global Management and D1 Capital Partners in 2021.
Groq specializes in chips designed for inference, aimed at processing AI that is already deployed. The company’s chips, known as “language processing units,” are said to be over ten times faster than traditional chips and one-tenth the cost. Groq has raised a total of $367 million since its founding in 2016 by former Google executive Jonathan Ross.
Despite this news, Groq faces competition from companies such as SiMa.ai, Dmatrix, and Untether.AI in the hardware inference sector as they aim to challenge Nvidia’s dominance. Another Nvidia rival, Cerebras, has reportedly filed for an IPO confidentially. Additionally, there was a dispute at Social Capital, a venture firm founded by Chamath Palihapitiya where two partners were fired after being accused of soliciting outside investment for Groq.
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