AI chip startup Groq raises $750 million at a $6.9 billion valuation
AI chip startup Groq announced Wednesday that it has raised $750 million in fresh funding at a post-money valuation of $6.9 billion. The financing exceeded expectations, topping earlier reports from July that suggested the round would come in at about $600 million at a near $6 billion valuation.
This latest raise underscores the company’s rapid ascent. Just last August, Groq brought in $640 million at a $2.8 billion valuation. In roughly a year, the company has more than doubled its valuation, bringing its total funding to over $3 billion, according to PitchBook estimates.
A Challenger to Nvidia’s Dominance
Groq has captured attention for its attempt to loosen Nvidia’s grip on the AI hardware market. Unlike traditional GPUs that dominate AI workloads, Groq’s processors—dubbed LPUs, or language processing units—are optimized specifically for inference, the stage where AI models are deployed to deliver results.
The company brands its hardware as an “inference engine” designed to run models quickly, efficiently, and at lower cost. Its products are offered as a cloud service or as on-premises clusters—server racks equipped with Groq’s integrated hardware and software stack. Both configurations run open versions of widely used models from Meta, DeepSeek, Qwen, Mistral, Google, and OpenAI.
Groq claims its systems maintain or even improve performance while reducing costs compared to alternatives, making them attractive for developers and enterprises looking for scalable AI infrastructure.
Strong Growth and Developer Adoption
The momentum has translated into sharp adoption gains. Groq now supports the AI apps of more than 2 million developers, a dramatic jump from 356,000 developers a year ago, when it last spoke with TechCrunch.
Founder Jonathan Ross brings a deep background to the space, having previously worked at Google where he helped develop the Tensor Processing Unit (TPU)—Google’s machine learning accelerator announced in 2016. Groq emerged from stealth the same year, and TPUs remain core to Google Cloud’s AI offerings.
Backed by Heavyweight Investors
The new round was led by Disruptive, with participation from BlackRock, Neuberger Berman, Deutsche Telekom Capital Partners, and others. Existing backers including Samsung, Cisco, D1, and Altimeter also joined in.
The funding highlights how Groq has become a strategic bet for investors eager to diversify beyond Nvidia, whose GPUs dominate the AI supply chain.
