Key Takeaways
Groq raised $350 million at a $3.5 billion valuation, down from the $6.9 billion it reached in September 2025.
The drop follows a licensing deal under which Nvidia hired Groq founder and CEO Jonathan Ross along with much of the company's top talent.
Groq now operates 13 data centers running Nvidia systems, which makes the remaining company an Nvidia customer, and Nvidia is investing in the round.
Groq raised $350 million on Monday at a $3.5 billion valuation, roughly half what the company was worth last September, before Nvidia licensed its technology and hired away its founder and much of its staff.
The round was led by the Dallas investment firm Disruptive, with planned participation from Nvidia, according to TechCrunch. Groq hit $6.9 billion in September 2025. A few months later Nvidia struck the licensing deal and brought on chief executive Jonathan Ross and other key employees. A Groq spokesperson said the company does not read the new number as a down round, describing it instead as a fresh valuation for the version of Groq that exists after the licensing deal.
What Groq does now is not what it set out to do. The company was building its own chips, called language processing units, specifically to compete with Nvidia on inference, the compute needed to run AI models in real time. After losing its team it became a cloud and data center operator that runs Nvidia systems. Today it operates 13 data centers across North America, Europe, the Middle East and Asia Pacific, serving more than 6 million developers and companies, and it plans to scale from 54 megawatts to more than 200 by 2027. It raised $650 million in June to start that pivot.
"We are building Groq into the world's leading AI inference cloud," said Alex Davis, Groq's chairman and the chief executive of Disruptive, in the company's announcement.
The most notable part of this is that Nvidia sits on both sides of the trade. It licensed the technology, hired the people, and is now putting money into what remains, which will spend that money on Nvidia hardware. The same day, Nvidia committed $1.5 billion to a SoftBank data center developer. That circularity is the open question WYDE raised when Nvidia and six Wall Street firms committed $500 billion to finance AI infrastructure with compute as collateral, and it is the same market that just handed Databricks $5 billion at a $190 billion valuation. Money is not the constraint. Independence is.
People Also Ask
Why did Groq's valuation fall?
Nvidia licensed Groq's technology and hired founder and CEO Jonathan Ross along with much of the top team, which removed the chip business Groq's higher valuation had been built on.
Who led Groq's $350 million round?
The Dallas investment firm Disruptive led it, with planned participation from Nvidia. Disruptive's chief executive Alex Davis is also Groq's chairman.
What does Groq do now?
It operates as a neocloud, running 13 data centers on Nvidia hardware and selling inference and training capacity to developers and enterprises rather than building its own chips.
Is a neocloud a profitable business?
That is still unsettled. CoreWeave has posted strong revenue growth and large contracts, but investors have raised concerns about heavy capital spending, reliance on debt and hardware that depreciates quickly.