Groq raises $350 million after shifting toward AI cloud services

Groq has raised $350 million as it continues its shift from AI chipmaker to neocloud provider, TechCrunch reports. The round, led by Disruptive with planned participation from Nvidia, values the company at $3.5 billion.

That is well below the $6.9 billion valuation Groq reached last September, before Nvidia hired founder and CEO Jonathan Ross and other top talent in a licensing deal. Groq says it does not view the new round as a down round, but as a valuation for the post-licensing-deal version of the company.

The strategic change is stark. Groq once focused on LPUs, or language processing units, to compete with Nvidia on real-time inference. It is now becoming an operator of Nvidia systems and a cloud infrastructure customer. The raise shows how strong demand for AI compute can keep a company relevant even after its original chip strategy changes, but it also underlines Nvidia's gravitational pull over the AI infrastructure market.