Nvidia to buy AI chip startup Groq’s assets for about $20 billion in largest deal on record
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Merry Christmas Jonathan Ross (Groq’s Founder)! $20B will buy a lot of holiday cheer! 🎁
Today, Groq announced that it has entered into a non-exclusive licensing agreement with Nvidia for Groq’s inference technology. The agreement reflects a shared focus on expanding access to high-performance, low cost inference.
As part of this agreement, Jonathan Ross, Groq’s Founder, Sunny Madra, Groq’s President, and other members of the Groq team will join Nvidia to help advance and scale the licensed technology.
Groq will continue to operate as an independent company with Simon Edwards stepping into the role of Chief Executive Officer.
GroqCloud will continue to operate without interruption.
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My Financé
Is there a reason for this type of deal structure as compared to a more conventional acquisition structure? Sounds similar to the windsurf situation.
@catt_marroll this is the Inflection AI playbook (which is likely what you meant) executed to perfection, designed solely to bypass the FTC and DOJ. Nvidia knows a traditional acquisition of a direct hardware competitor would trigger an immediate antitrust freeze lasting 18 to 24 months, which is a death sentence for the asset given the current speed of the AI arms race
By structuring this as a non-exclusive license and a mass hiring event, they get the IP and the team starting tomorrow while leaving the Groq legal entity alive as a hollowed-out shell, technically avoiding a "merger" on paper while achieving total absorption in practice without the bureaucratic drag
DiffSense
Let's call a spade a spade this isn't a licensing agreement, it's an antitrust dodge. We've seen this playbook with Microsoft/Inflection and Amazon/Adept. Nvidia knows a direct $20B acquisition of a competitor would be blocked by the FTC instantly. So they license the IP and hire the founders, leaving the Groq legal entity as a shell. This is the end of the alternative hardware dream. If you can't beat Nvidia, they will buy you for parts
I think it's good for the founders, but it does seem like Nvidia is killing its rivals.
Groq will never do anything that can hurt Nvidia's profits or market share after this. For me, it's just an aggressive acquisition strategy without being sued.
Am I wrong?