The chip startup that was going to beat Nvidia raised money on 17 August at half its old price
Groq announced a $350 million round led by Disruptive on 17 August, valuing the company at $3.5 billion — down from $6.9 billion in September 2025. Groq spent years building its own LPU chips to challenge Nvidia on inference, the work of actually running models rather than training them. In December 2025 Nvidia licensed that technology in a deal worth around $20 billion and hired founder and chief executive Jonathan Ross along with much of the senior team. What remains is being rebuilt as a 'neocloud': selling inference capacity rather than chips, across 13 data centres, serving over six million developers and enterprises, with plans to grow from 54 megawatts to more than 200 by 2027. Nvidia was set to take part in the new round.
Why it mattersThe valuation is the whole story. A company can build something good enough that Nvidia pays roughly $20 billion for the right to use it and still be worth half what it was two years ago, because the technology and the people who understood it left with the cheque. What is left competes as a landlord for computing power rather than an inventor of it — and part of its new funding comes from the firm that bought its advantage. For anyone hoping a serious rival to Nvidia would emerge in inference, this is one fewer.
▶ Related video: Nvidia's deal with Groq and what it means for the chipmaker and AI
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