Groq raises $650 million with no valuation disclosed to buy Nvidia-branded racks of its own chip
Nvidia sells Groq's design as its own rack with Nebius as first customer, while the founderless Groq raises $650 million at a valuation nobody will name to run the same silicon in its own cloud.
Vincent Jiang · 2 min read
Groq$3.5B — Groq, private, latest valuation $3.5B designed the LPU, a processor built for one job: generating AI tokens fast. In December 2025 the company confirmed a $20 billion non-exclusive license to Nvidia, and founder-CEO Jonathan Ross plus other senior executives left for Nvidia−4.13% — Nvidia, down 4.13 percent today 3. The chip did not fail; its route to the customer changed.
Nvidia now sells the chip Groq built, and Groq buys it back
Nvidia's Groq 3 LPX rack packs 256 Groq 3 LPUs with 128GB of on-chip SRAM, reached full production by August 2026, and counted cloud operator Nebius−6.89% — Nebius, down 6.89 percent today as its first customer 3. Nvidia's published benchmark shows 3,400 output tokens per second on Gemma 4 31B at a 100K-token context, a vendor test, not independent verification 2. Dell handles delivery and integration 2. Meanwhile GroqCloud, the part that stayed independent, will retrofit its own sites with the same silicon under Nvidia's brand 1.
The $650 million round has a visible conflict of interest
The round was led by Disruptive, founded by Alex Davis, who also chairs Groq's board, alongside hedge fund Infinitum; no valuation was disclosed 14. TechCrunch reported the announcement in June 2026, when Groq's last private mark stood at $6.9 billion from a September 2025 round 4. The money funds a target of 200 megawatts of inference capacity by the end of 2027 across 13 data centers, serving more than 5 million developers moving trillions of tokens weekly 1. Targets are plans, not capacity online.
Nvidia's license price dwarfs Groq's last private mark and its nearest peer's
Data
| Value | |
|---|---|
| Nvidia license for Groq tech | $20B |
| Groq last valuation (Sep 2025) | $6.9B |
| Tenstorrent Series E valuation | $6.2B |
The record before the license explains the urgency
In July 2025, Groq cut its 2025 revenue projection from more than $2 billion to more than $500 million, citing data-center capacity delays 3. A cloud cannot sell capacity it has not built. That shortfall is what the new capital is racing to fix.
What to watch
Readers of our earlier pieces on the Delaware fight to reprice Nvidia's license know the open question: who controls manufacturing allocation and pricing. Groq's own cloud buying Nvidia-branded racks makes that fight worth following. The unnamed valuation is the tell.
First-time readers: the LPU (language processing unit) is an inference chip, and inference is the step where a trained model answers. Related reading linked below.
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