Groq, a startup that specializes in chips for artificial intelligence (AI), is reportedly set to raise $2.5 billion in a new funding round led by Blackrock. Sources have not yet confirmed the specifics of the deal, but it is expected to more than double Groq’s previous valuation of $1.5 billion. This new financing comes after rumors circulated that the company was looking to raise $300 million in new funding, which they hired Morgan Stanley to help with.
Groq’s chips, known as “language processing units,” are designed for inference and are said to be over ten times faster than traditional chips and one-tenth the cost. The company has raised a total of $367 million since its founding in 2016 by former Google executive Jonathan Ross. However, Groq faces competition from other hardware inference startups such as SiMa.ai, Dmatrix, and Untether.AI, all of whom are aiming to challenge Nvidia’s dominance in the sector.
Notably, Groq was at the center of a dispute at Social Capital, a venture firm founded by Chamath Palihapitiya. Two partners were fired from the firm in March after being accused of soliciting outside investment for Groq, a company that had been backed by Social Capital eight years ago. Despite this controversy, it appears that Groq is continuing to grow and attract investment from major players like Blackrock.
