Wed Dec 24 21:00:00 UTC 2025: Here’s a summary of the text and a rewritten news article:

Summary:

Nvidia is reportedly acquiring Groq, an AI accelerator chip designer, for $20 billion in cash. The deal, if finalized, would be Nvidia’s largest acquisition to date, surpassing its 2019 purchase of Mellanox. Groq, founded by former Google engineers, recently raised $750 million at a $6.9 billion valuation. The Groq cloud business is excluded from the acquisition. Nvidia has been increasing its investments in various AI-related companies, including Crusoe, Cohere, and CoreWeave. Other chip startups like Cerebras Systems are also gaining traction, though Cerebras recently withdrew its IPO plans.

News Article:

Nvidia Set to Acquire AI Chip Startup Groq for $20 Billion

Santa Clara, CA – Nvidia is poised to make its biggest acquisition ever, agreeing to buy Groq, a designer of high-performance AI accelerator chips, for a staggering $20 billion in cash, according to sources familiar with the deal. The move underscores Nvidia’s commitment to dominating the rapidly expanding artificial intelligence landscape.

Groq, founded in 2016 by former Google engineers, including Jonathan Ross, a creator of Google’s Tensor Processing Unit (TPU), has been gaining attention for its innovative chips designed to accelerate AI workloads, particularly in inference-related tasks for large language models. The company had been targeting $500 million in revenue this year amidst surging demand.

“This acquisition will significantly bolster Nvidia’s capabilities in the AI accelerator space,” said one industry analyst. “Groq’s technology complements Nvidia’s existing offerings and positions them even more strongly for future growth.”

The deal comes just months after Groq raised $750 million in a financing round led by Disruptive, valuing the company at approximately $6.9 billion. Investors in that round included prominent firms such as Blackrock, Neuberger Berman, Samsung, Cisco, and others.

While the acquisition encompasses all of Groq’s assets, its nascent Groq cloud business is not included.

Nvidia, which had over $60 billion in cash and short-term investments at the end of October, has been actively investing in AI-related ventures. Recent investments include AI and energy infrastructure company Crusoe, AI model developer Cohere, and cloud provider CoreWeave.

The proposed acquisition is subject to regulatory approval and other customary closing conditions. Nvidia declined to comment on the reported deal.

This acquisition marks a major milestone in the competitive AI chip market, where other companies like Cerebras Systems are also vying for market share. Cerebras recently withdrew its IPO plans despite raising over $1 billion, suggesting a shifting landscape in the AI hardware sector.

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