Are they buying them to try and slow down open source models and protect the massive amounts of money they make from OpenAI, Anthropic, Meta ect?
It quite obvious that open source models are catching up to closed source models very fast they about 3-4 months behind right now, and yeah they are trained on Nvidia chips, but as the open source models become more usable, and closer to closed source models they will eat into Nvidia profit as these companies aren't spending tens of billion dollars on chips to train and run inference. These are smaller models trained on fewer GPUs and they are performing as good as the pervious OpenAI and Anthropic models.
So obviously open source models are a direct threat to Nvidia, and they only thing open source models struggle at is scaling inference and this is where Groq and Cerberus come into the picture as they provide the fastest inference for open source models that make them even more usable than SOTA models.
Shy of an algo breakthrough, open source isn't going to catch up with SOTA, their main trick for model improvement is distilling the SOTA models. That's why they they have perpetually "right behind".
They need to vertically integrate the entire stack or they die. All of the big players are already making plans for their own chips/hardware. They see everyone else competing for the exact same vendor’s chips and need to diversify.
Idk- cheaper inference seems to be a huge industry secret and providing the best inference tech that only works with nvidia seems like a good plan. Makes nvidia the absolute king of compute against AWS/AMD/Intel seems like a no brainer.
> 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.
as useful as it was before this administration when big tech was sucking up to whomever was running the country (e.g. “macho man” Zuck was getting ready to tattoo DEI on his forehead couple of years ago) or just now it’ll be magically useful?
The price is 40x their target revenue. That's twice the price to revenue multiplier applied to Anthropic in their most recent funding round, and really really hard to portray as a good deal.
I don't think it really helps Nvidia's competitive position. The serious competition to Nvidia is coming from Google's TPU, Amazon's Trainium, AMD's Instinct, and to a much lesser extent Intel's ARC.
Grow recent investors got back a 3x multiple and may now invest in one of Nvidia's other competitors instead.
The only thing I can think of here is that OpenAI’s DRAM land grab is going to stack on a non-NV target and NV need to hedge with an SRAM design that’s on the market NOW. Otherwise, I can’t see how NV couldn’t eat Groq’s lunch in one development cycle - it’s not like NV can’t attach a TPU to some SRAM and an interconnect. Either that or Groq closed a deep enough book to scare them, but 40x is a lot of scared.
I do not understand this move by Nvidia, they are afraid of being out competed by this startup in their core competence of building chips for AI? They may be eliminating a competitor for now but this move will immediately many more AI chip startups to get founded
They're not eliminating a competitor, they're (effectively) acquiring a competitor. Nvidia's GPUs are great for training, and not bad for inference, but the custom chips are better for inference and Nvidia's worried about losing customers. Nvidia will no doubt sell custom Groq-like chips for inference now.
groq is a series E hardware startup founded in 2016. It took them this long to be a potential threat, I'm not sure they are even an actual threat.
Even if this purchase causes 100 new hardware startups to be funded tomorrow, nVidia is perfectly fine with that. Let's see how many survive 5 years down the line
the play is 10x faster inference leads to 100x demand give or take, which isn't a bad assumption at all if you ask me. the problem is actually fitting a good model onto hardware that fast.
There are others as well but NVidia is aggressive when it comes to punishing companies willing to buy non-NVidia products. As a result, they prefer to remain under the radar, at least until they have enough market leverage to be more widely known.
I just stopped my Groq API. Sad to see competition being eaten up by shitty Nvidia. I like their products but Jensen is an absolute mfer with deceitful marketing.
Legit feels like Nvidia just buying out competition to maintain their position and power in the industry. I sincerely hope they fall flat on their face.
> Legit feels like Nvidia just buying out competition to maintain their position and power
Well, I mean, isn't that exactly what they should be doing? (I'm not talking about whether or not it benefits society; this is more along the lines of how they're incentivized.)
Put yourself in their shoes. If you had all that cash, and you're hearing people talk of an "AI Bubble" on a daily basis, and you want to try and ensure that you ride the wave without ever crashing... the only rational thing to do is use the money to try and cover all your bases. This means buying competitors and it also means diversifying a little bit.
Dunno thought AGI would make everything obsolete and it's just around the corner? It looks rather like it dawns on everyone that transformers won't bring salvation. It's a show of weakness.
The bottleneck in training and inference isn’t matmul, and once a chip isn’t a kindergarten toy you don’t go from FPGA to tape out by clicking a button. For local memory he’s going to have to learn to either stack DRAM (not “3000 lines of verilog” and requires a supply chain which openai just destroyed) or diffuse block RAM / SRAM like Groq which is astronomically expensive bit for bit and torpedoes yields, compounding the issue. Then comes interconnect.
Look dude, this guy failed his Twitter internship and is not about to take on Jensen Huang. This isn't some young guy anymore and this isn't 200x where is he about to have another iPhone / Sony moment.
There's this curious experience of people bringing up geohot / tinygrad and you can tell they've been sold into a personality cult.
I don't mean that pejoratively, I apologize for the bluntness. It's just I've been dealing with his nonsense since iPhone OS 1.0 x jailbreaking, and I hate seeing people taken advantage of.
(nvidia x macs x thunderbolt has been a thing for years and years and years, well before geohot) (tweet is non-sequitor beyond bogstandard geohot tells: odd obsession with LoC, and we're 2 years away from Changing The Game, just like we were 2 years ago)
Imagine a pharma with a weight loss drug that isn't approved yet; it's either worth $20B (if approved) or zero (if not approved).
Now imagine the LPUv2 ASIC. If it works it's worth $20B and if it doesn't it's zero. If investors think LPUv2 has a 1/3 chance of success they would buy in at $7B. Then the chip boots up and... look at that.
Maybe the EU or individual states will sue under their own anti-trust laws will stop this - seems pretty clearly anti-competitive and probably a prelude of these over-valued companies using their stock to gobble up any possible competitor to consolidate even more.
They almost certainly plan to invest in the technology. One of the biggest threats to Nvidia is people developing AI-centric ASICs before they get there. Yes, Google has their TPUs and there are others around, but it's early on.
In some ways, it's not about eliminating a competitor. It's about eliminating all the competitors. Nvidia can use its resources to push AI ASICs farther faster than others, potentially cutting off a whole host of competitors that threaten their business. Nvidia has the hardware and software talent, the money, and the market position to give their AI ASICs an advantage. They know if they don't lean into ASICs that someone else will and their gravy train will end. So they almost certainly won't be abandoning the technology.
I think it’s pretty obvious at this point that Nvidia’s architecture has reached scaling limits - the power demands of their latest chips has Microsoft investing in nuclear fusion. Similar to Intel in both the pre-Core days and their more recent chips, they need an actual new architecture to move forward. As sits, there’s no path to profitability for the buyers of these chips given the cost and capabilities of the current LLM architectures, and this is obvious enough that even Nvidia has to realize it’s existential for them.
If Groq’s architecture can actually change the economics of inference and training sufficient to bring the costs in line with the actual, not speculative, benefits of LLMs, this may not be a buy-and-kill for Nvidia but something closer to Apple’s acquisition of P.A. Semi, which made the A- and M- class chips possible.
(Mind you, in Intel’s case they had to have their clocks cleaned by AMD a couple times to get them to see, but I think we’re further past the point of diminishing returns with Nvidia - I think they’re far enough past when the economics turned against them that Reality is their competition now.)
No path to profitability for the people using their products for their putative purpose, which seems like it might affect Nvidia’s bottom line at some point. Clarified.
For nvidia increasing the numbers of their money-multiplying mutual investment ring is more important than the value of the deals. It's about involving more capital and people and making their grift too big to fail and keeping the stock numbers up. Nvidia has the ability to promise large amounts of money like this in announcements but I haven't read about any of them actually having money or good exchange hands yet.
No, it doesn't really matter if they pay in cash or stock. If you think NVDA has room to run you're welcome to use your buyout money to buy NVDA on the open market.
Can't wait for the abuse of the word Grok to die (bet none of these techbros even read the book). There was even an AI company that made a product called "Sophon". Talk about an overinflated sense of self-worth.
I like the Wright Brothers, they called the first plain, "Flyer".
> Groq is expected to alert its investors about the deal later on Wednesday. While the acquisition includes all of Groq’s assets, its nascent Groq cloud business is not part of the transaction, said Davis.
Wait, what? How is the cloud business supposed to run if Nvidia is acquiring the rights to the hardware?
It isn't, and the other companies that offer cloud AI that Nvidia has invested in can carry on happy they have one less competitor.
This is how business works in the 21st century - once one company has a dominant position and a massive warchest they can just buy any business that has any potential of disrupting their revenue. It's literally the thesis Peter Thiel sets out in Zero To One. It works really well for that one business.
That works fine with office buildings and stuff where a company is redistributing its risk profile, but not when the company it’s selling to has every incentive to kill the asset as a competitor.
this is genuinely sad, groq had really fast inference and was a legit alternative architecture to nvidia's dominance. feels like we're watching consolidation kill innovation in real time. really hoping regulators actually look at this one but not holding my breath
> Groq raised $750 million at a valuation of about $6.9 billion three months ago. Investors in the round included Blackrock and Neuberger Berman, as well as Samsung, Cisco, Altimeter and 1789 Capital, where Donald Trump Jr. is a partner.
I don't know specifically, but I think they're referring to the current USA administration's posture of approving anything, or pardoning anyone, in exchange for some cryptocurrency or similar big favour.
Uh oh, not good that a major Nvidia competitor with genuine alternative technology will no longer be competing... Chances this tech gets killed post-acquisition?
It quite obvious that open source models are catching up to closed source models very fast they about 3-4 months behind right now, and yeah they are trained on Nvidia chips, but as the open source models become more usable, and closer to closed source models they will eat into Nvidia profit as these companies aren't spending tens of billion dollars on chips to train and run inference. These are smaller models trained on fewer GPUs and they are performing as good as the pervious OpenAI and Anthropic models.
So obviously open source models are a direct threat to Nvidia, and they only thing open source models struggle at is scaling inference and this is where Groq and Cerberus come into the picture as they provide the fastest inference for open source models that make them even more usable than SOTA models.
Maybe I'm way off on this.
> 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.
I wonder if equity holding employees get anything from the deal or indeed if all the investors will be seeing a return from this?
It will prove to be simple corruption.
Media said it was crazy back then, well I think this sounds a lot crazier but hindsight is 20/20.
I don't think it really helps Nvidia's competitive position. The serious competition to Nvidia is coming from Google's TPU, Amazon's Trainium, AMD's Instinct, and to a much lesser extent Intel's ARC.
Grow recent investors got back a 3x multiple and may now invest in one of Nvidia's other competitors instead.
I'm following the chip industry on a daily basis and never heard of them...
Even if this purchase causes 100 new hardware startups to be funded tomorrow, nVidia is perfectly fine with that. Let's see how many survive 5 years down the line
NVIDIA isn't buying Groq.
It's a non exclusive deal for inference tech. Or am I reading it incorrectly?
AI Chip Startup Groq Raises $750M at $6.9B Valuation - https://news.ycombinator.com/item?id=45276985 - Sept 2025 (5 comments)
Groq Raises $640M to Meet Soaring Demand for Fast AI Inference - https://news.ycombinator.com/item?id=41162875 - Aug 2024 (34 comments)
AI chip startup Groq lands $640M to challenge Nvidia - https://news.ycombinator.com/item?id=41162463 - Aug 2024 (12 comments)
Groq CEO: 'We No Longer Sell Hardware' - https://news.ycombinator.com/item?id=39964590 - April 2024 (149 comments)
Well, I mean, isn't that exactly what they should be doing? (I'm not talking about whether or not it benefits society; this is more along the lines of how they're incentivized.)
Put yourself in their shoes. If you had all that cash, and you're hearing people talk of an "AI Bubble" on a daily basis, and you want to try and ensure that you ride the wave without ever crashing... the only rational thing to do is use the money to try and cover all your bases. This means buying competitors and it also means diversifying a little bit.
It's just an anti-competitive move that could be very bad for the consumer as it makes the inference market less competitive.
it's not like Nvidia doesn't invest a ton into R&D, but hey, they have the cash, why not use it? like a good business.
Also: https://x.com/__tinygrad__/status/1983469817895198783
However, I would say you are wrong about it being only smoke
It is peak delulu.
Edit: His whole blog is 'hot take #n'. Not even anything serious. Basically podcast bro level stuff. https://geohot.github.io/blog/jekyll/update/2025/12/22/the-o...
I don't mean that pejoratively, I apologize for the bluntness. It's just I've been dealing with his nonsense since iPhone OS 1.0 x jailbreaking, and I hate seeing people taken advantage of.
(nvidia x macs x thunderbolt has been a thing for years and years and years, well before geohot) (tweet is non-sequitor beyond bogstandard geohot tells: odd obsession with LoC, and we're 2 years away from Changing The Game, just like we were 2 years ago)
Can someone with better understanding dumb this down for me please?
Now imagine the LPUv2 ASIC. If it works it's worth $20B and if it doesn't it's zero. If investors think LPUv2 has a 1/3 chance of success they would buy in at $7B. Then the chip boots up and... look at that.
Or it's just a massive bubble.
In some ways, it's not about eliminating a competitor. It's about eliminating all the competitors. Nvidia can use its resources to push AI ASICs farther faster than others, potentially cutting off a whole host of competitors that threaten their business. Nvidia has the hardware and software talent, the money, and the market position to give their AI ASICs an advantage. They know if they don't lean into ASICs that someone else will and their gravy train will end. So they almost certainly won't be abandoning the technology.
But that doesn't mean that it'll be good for us.
I think it’s pretty obvious at this point that Nvidia’s architecture has reached scaling limits - the power demands of their latest chips has Microsoft investing in nuclear fusion. Similar to Intel in both the pre-Core days and their more recent chips, they need an actual new architecture to move forward. As sits, there’s no path to profitability for the buyers of these chips given the cost and capabilities of the current LLM architectures, and this is obvious enough that even Nvidia has to realize it’s existential for them.
If Groq’s architecture can actually change the economics of inference and training sufficient to bring the costs in line with the actual, not speculative, benefits of LLMs, this may not be a buy-and-kill for Nvidia but something closer to Apple’s acquisition of P.A. Semi, which made the A- and M- class chips possible.
(Mind you, in Intel’s case they had to have their clocks cleaned by AMD a couple times to get them to see, but I think we’re further past the point of diminishing returns with Nvidia - I think they’re far enough past when the economics turned against them that Reality is their competition now.)
Didn't Anthropic say inference is already profitable?
Graphcore
Tenstorrent
SambaNova
Rivos
Will there be a truck full of paper money or not?
(Electronically)
I like the Wright Brothers, they called the first plain, "Flyer".
Quite obvious that Groq would get acquired. [0]
[0] https://news.ycombinator.com/item?id=39438820
Wait, what? How is the cloud business supposed to run if Nvidia is acquiring the rights to the hardware?
This is how business works in the 21st century - once one company has a dominant position and a massive warchest they can just buy any business that has any potential of disrupting their revenue. It's literally the thesis Peter Thiel sets out in Zero To One. It works really well for that one business.
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.
States are "not allowed" to regulate AI companies.
A free market is a regulated market. Otherwise you will end up with monopolies and a dead market.