Nvidia has struck a non-exclusive licensing agreement with AI chip competitor Groq. As part of the deal, Nvidia will hire Groq founder Jonathan Ross, president Sunny Madra, and other employees.
CNBC reported that Nvidia is acquiring assets from Groq for $20 billion; Nvidia told TechCrunch that this is not an acquisition of the company and did not comment on the scope of the deal. But if CNBC’s numbers are accurate,this purchase is expected to be Nvidia’s largest ever,and with Groq on its side,Nvidia is poised to become even more dominant in chip manufacturing.
As tech companies compete to grow their AI capabilities, they need computing power, and Nvidia’s GPUs have emerged as the industry standard. But Groq has been working on a different type of chip called an LPU (language processing unit), which it has claimed can run LLMs at 10 times faster and using one-tenth the energy. Groq’s CEO Jonathan Ross is known for this sort of innovation – when he worked for Google, he helped invent the TPU (tensor processing unit), a custom AI accelerator chip.
In September, Groq raised $750 million at a $6.9 billion valuation. Its growth has been quick and meaningful – the company said that it powers the AI apps of more than 2 million developers, up from about 356,000 last year.
Updated, 12/24/25 at 5:40 p.m.ET, with clarification from Nvidia about the nature of the deal.
Analysis of Changes & Answers to Questions:
* Why: Nvidia and Groq entered into a licensing agreement, with Nvidia also acquiring assets and key personnel from Groq, to bolster Nvidia’s position in the rapidly growing AI chip market and gain access to Groq’s LPU technology.
* Who: The key players are Nvidia, Groq, Jonathan Ross (Groq founder and CEO), and Sunny Madra (Groq president).
* What: Nvidia and Groq have a non-exclusive licensing agreement. CNBC reported a $20 billion asset acquisition by Nvidia,but Nvidia clarified it is not a full company acquisition.Nvidia is hiring Groq personnel.
* How: The deal involves a licensing agreement, asset purchase