AI chip startup Groq confirmed Wednesday that it raised a fresh $750 million in funding at a post-money valuation of $6.9 billion.
This topped the rumored numbers when word leaked in July that Groq was raising. At that time, reports suggested that the raise would be about $600 million, at near a $6 billion valuation.
Groq, which also sells data center computing power, previously raised $640 million at a $2.8 billion valuation in August 2024, making this more than double the valuation in about a year. Groq has now raised over $3 billion to date, PitchBook estimates.
Groq has been a hot commodity because it is working on breaking the chokehold that AI chip maker Nvidia has over the tech industry. Groq’s chips are not GPUs, the graphics processing units that typically power AI systems. Instead, Groq calls them LPUs (language processing units) and calls its hardware an inference engine — specialized computers optimized for running AI models quickly and efficiently.
Its products are geared toward developers and enterprises, available as either a cloud service or an on-premises hardware cluster. The on-prem hardware is a server rack outfitted with a stack of its integrated hardware/software nodes. Both the cloud and on-prem hardware run open versions of popular models, like those from Meta, DeepSeek, Qwen, Mistral, Google, and OpenAI. Groq says its offerings maintain, or in some cases improve, AI performance at significantly less cost than alternatives.
