--- title: "Groq raises $650 million with no valuation disclosed to buy Nvidia-branded racks of its own chip" description: "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." publisher: "The Inference" section: "Chips" published: 2026-10-22T14:14:47.652Z modified: 2026-10-22T14:14:47.652Z canonical: https://theinference.org/article/groq-raises-650-million-with-no-valuation-disclosed-to-buy-nvidia-branded-racks-of-its-own-chip language: en keywords: "Groq, Nvidia, AI Chips, Funding, Data Centers" --- # 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. [Groq](https://theinference.org/markets/companies/groq) 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](https://techcrunch.com/2026/06/22/ai-chipmaker-groq-confirms-650m-raise-re-staffs-after-nvidias-20b-not-acqui-hire-deal/), and founder-CEO [Jonathan Ross](https://theinference.org/markets/people/jonathan-ross) plus other senior executives left for [Nvidia](https://theinference.org/markets/companies/nvidia) [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](https://theinference.org/markets/companies/nebius) as its first customer [3]. [Nvidia's published benchmark shows 3,400 output tokens per second](https://news.hamidun.com/en/news/13216/groq-is-first-to-deploy-nvidia-groq-3-lpx-3-400-tokens-s-on) 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 [1][4]. 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](https://news.hamidun.com/en/news/13215/groq-raises-650-million-targets-200-mw-of-inference-capacity) across 13 data centers, serving more than 5 million developers moving trillions of tokens weekly [1]. Targets are plans, not capacity online. *Chart: **Nvidia's license price dwarfs Groq's last private mark and its nearest peer's** Bars comparing three dollar figures: Nvidia's $20B license for Groq's technology, Groq's $6.9B last private valuation, and Tenstorrent's $6.2B Series E valuation.* *US dollars, billions. Nvidia license and Tenstorrent valuation per TEXXR (texxr.com, 2026); Groq's last valuation from a September 2025 round per TechCrunch (June 22, 2026). [3][4]* ## 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](https://theinference.org/article/groq-s-left-behind-engineers-sue-to-reprice-nvidia-s-20bn-deal) 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. ## Takeaway Groq raised $650 million from a board chair-led round with no valuation named, to buy back its own silicon inside Nvidia's racks, while the Delaware fight over the $20 billion license decides who controls the chip. ## Sources 1. [Hamidun News, Groq raises $650 million, targets 200 MW of inference capacity by 2027 (as collected 22 October 2026)](https://news.hamidun.com/en/news/13215/groq-raises-650-million-targets-200-mw-of-inference-capacity) 2. [Hamidun News, Groq Is First to Deploy NVIDIA Groq 3 LPX: 3,400 Tokens/s on Gemma 4 31B (as collected 22 October 2026)](https://news.hamidun.com/en/news/13216/groq-is-first-to-deploy-nvidia-groq-3-lpx-3-400-tokens-s-on) 3. [TEXXR, Nvidia's 256-LPU Groq Rack Has a Buyer (as collected 22 October 2026)](https://texxr.com/posts/groq-lpu-nvidia-rack-cloud-capacity) 4. [TechCrunch, AI chipmaker Groq confirms $650M raise, re-staffs after Nvidia's $20B not-acqui-hire deal, 22 June 2026](https://techcrunch.com/2026/06/22/ai-chipmaker-groq-confirms-650m-raise-re-staffs-after-nvidias-20b-not-acqui-hire-deal/) --- Groq raises $650 million with no valuation disclosed to buy Nvidia-branded racks of its own chip — The Inference. Canonical: https://theinference.org/article/groq-raises-650-million-with-no-valuation-disclosed-to-buy-nvidia-branded-racks-of-its-own-chip