Startup Groq raises $640 million in latest funding round

The startup will use the funding to scale the capacity of its TaaS offering and add new models and features to the GroqCloud, the firm said about the latest round of funds

Semiconductor startup Groq said on Monday it has raised $640 million in a Series D funding round led by Cisco Investments, Samsung Catalyst Fund and BlackRock Private Equity Partners, among others, bringing its valuation to $2.8 billion.

The Silicon Valley company, founded by a former Alphabet engineer, specialises in producing AI inference chips – a type of semiconductor that optimises speed and executes commands of pre-trained models.

Apart from big companies like Advanced Micro Devices, many startups including Groq have been trying to nibble away at Nvidia’s dominant position in the flourishing AI chip industry.

Last year, Groq adapted Meta Platforms’ large language model, LLaMA, to be able to run on its own chips rather than those of Nvidia’s. Meta researchers built LLaMA using Nvidia’s chips.

Cloud service providers rushing to develop their own AI products are also seeking alternatives to Nvidia’s top-of-the-line processors due to high demand but limited supply.

In 2021, Groq was valued at $1.1 billion after a funding from Tiger Global Management and D1 Capital.

The startup will use the funding to scale the capacity of its tokens-as-a-service (TaaS) offering and add new models and features to the GroqCloud, the firm said about the latest round of funds.

Groq will deploy over 108,000 Language Processing Units manufactured by Global Foundries by the end of the first quarter of next year.

Groq has also announced the appointment of Stuart Pann, a former senior executive at Intel and HP Inc, as its chief operating officer (COO), while Meta’s chief AI scientist Yann LeCun was named its newest technical adviser.