AI chip startup Groq raises $640 million in BlackRock-led round
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Tiffany Herring/Axios
Groq, a startup whose chips are specialized for running AI models, raised $640 million in Series D funding at a $2.8 billion valuation led by BlackRock funds.
Why it matters: As the AI race shows no sign of slowing down, investors and customers are looking to new infrastructure options that could give them an edge.
- Groq claims its chip, dubbed a "language processing unit" (or LPU), is faster and one-tenth of the cost of conventional graphics processing units commonly used in training AI models.
- Its chips are focused on "inference," that is running AI models, which is an increasing use as AI companies make their products available to users and customers.
Zoom in: The company says it's recently decided to mostly focus — for now at least — on selling access to its cloud services to AI developers over selling its chips to customers.
- "We found it hard to sell hardware because you couldn't viscerally experience it," Groq founder and CEO Jonathan Ross tells Axios. "Companies that are spending all this money… they want something they can trust, they can believe in."
- Meanwhile, its cloud service has grown from having a few developers using it to 350,000 now, he adds.
What's next: The company expects to reach over 100,000 chips deployed by the end of the first quarter next year, and 1.5 million by the end of 2025.
- It also hopes this new funding round helps it reach a scale at which it breaks even on its chips in less than two years, says Ross.
- Neuberger Berman, Type One Ventures, Cisco, KDDI and Samsung Catalyst Fund also participated in the round.
Go deeper: AI chip startup Groq grabs the spotlight
