It quite obvious that open source models are catching up to closed source models very fast they about 3-4 months behind right now, and yeah they are trained on Nvidia chips, but as the open source models become more usable, and closer to closed source models they will eat into Nvidia profit as these companies aren't spending tens of billion dollars on chips to train and run inference. These are smaller models trained on fewer GPUs and they are performing as good as the pervious OpenAI and Anthropic models.
So obviously open source models are a direct threat to Nvidia, and they only thing open source models struggle at is scaling inference and this is where Groq and Cerberus come into the picture as they provide the fastest inference for open source models that make them even more usable than SOTA models.
Maybe I'm way off on this.
GPT-5 models have been the most useless models out of any model released this year despite being SOTA, and it because it slow as fuck.
Could you elaborate? How is this done and what does this mean?
The opposite, I think.
Why do you think that local models are a direct threat to Nvidia?
Why would Nvidia let a few of their large customers have more leverage by not diversifying to consumers? Openai decided to eat into Nvidia's manufacturing supply by buying DRAM; that's concretely threatening behavior from one of Nvidia's larger customers.
If Groq sells technology that allows for local models to be used better, why would that /not/ be a profit source for Nvidia to incorporate? Nvidia owes a lot of their success on the consumer market. This is a pattern in the history of computer tech development. Intel forgot this. AMD knows this. See where everyone is now.
Besides, there are going to be more Groqs in the future. Is it worth spending ~20B for each of them to continue to choke-hold the consumer market? Nvidia can afford to look further.
It'd be a lot harder to assume good faith if Openai ended up buying Groq. Maybe Nvidia knows this.
And likely some of them are going to be in countries that won't let them sell out to Nvidia.
Almost all open source models are trained and mostly run on NVIDIA hardware.
Open source is great for NVIDIA. They want more open source, not less.
Commoditize your complement is business 101.
Yeah I'm disappointed by this, this is clearly to move them out of the market. Still, that leaves a vacuum for someone else to fill. I was extremely impressed by Groq last I messed about with it, the inference speed was bonkers.
If anything more companies in making models business the higher NVIDIA chip demand will be, till we get some proper competition at least. We badly need some open CUDA equivalent so moving off to competition isn't a problem
That said, it's completely anti-competitive. Nvidia could design a inference chip themselves, but instead the are locking down one of the only real independents. But... Nobody was saying Groq was making any real money. This might just be a rescue mission.
The open source economy relies on the wisdom of crowds. But that implies and equal access to experimentation platforms. The democratization of PC and consumer hardware brings the previous open source era that we all love, I am afraid the tech mongols had identified the chokehold of LLM ecosystem and found ways to successfully monopolized it
A. The inevitable breakdown of their massive head start with CUDA and data center hardware. A serious competitor at real scale.
B. Anything that'll cool off the massive data center buildouts that are fueling them.
Seems clear that locking up a major potential competitor especially the minds behind it solves for A. And their ongoing machinations with circular funding of companies funding data centers is all about B - keeping the momentum before it fizzles.
> Maybe I'm way off on this.
If by open source, you mean downloadable from huggingface and SOTA you mean opus 4.5, yes you are way off.
The more competition, the more shovels they sell.
It's like saying that Intel would've benefited if only Dell and few others sold servers because they brought in multiple billions per year.
Look at Nvidia nemotron series. They hav become a leading open source training lab themselves and they’re releasing the best training data, training tooling, and models at this point.
It should be noted that Don Jr. is one of the investors who will benefit greatly if/when this goes through.
I don't think it really helps Nvidia's competitive position. The serious competition to Nvidia is coming from Google's TPU, Amazon's Trainium, AMD's Instinct, and to a much lesser extent Intel's ARC.
Grow recent investors got back a 3x multiple and may now invest in one of Nvidia's other competitors instead.
Joke aside, the strategic choices here and there hint at the blood lust of all other actors to dethrone Nvidia, it’s fascinating.
As an example: if google TPU (perfected?) itself to the point that it hurts nvidia sales (maybe mass production perhaps?) then all the companies stock price might decrease (in my opinion including google)
Honestly, I feel like there is going to happen something in the market which is gonna be very spooky soon regarding AI.
I feel like we are gonna drag this bubble really long and actually worsen all the pain which is gonna be caused by it long term.
> Today, Groq announced that it has entered into a non-exclusive licensing agreement with Nvidia for Groq’s inference technology. The agreement reflects a shared focus on expanding access to high-performance, low cost inference.
> As part of this agreement, Jonathan Ross, Groq’s Founder, Sunny Madra, Groq’s President, and other members of the Groq team will join Nvidia to help advance and scale the licensed technology.
> Groq will continue to operate as an independent company with Simon Edwards stepping into the role of Chief Executive Officer.
> GroqCloud will continue to operate without interruption.
I wonder if equity holding employees get anything from the deal or indeed if all the investors will be seeing a return from this?
I've seen venture capital acquire startups for essentially nothing laying off the entire product team aside from one DevOps engineer to keep everything running. I've seen startups go public and have their shares plummet to zero before the rank-and-file employees could sell any shares (but of course the executives were able to cash out immediately). I've seen startups acquired for essentially nothing from the lead investor.
In none of these scenarios did any of the Engineers receive anything for their shares.
Yet every day people negotiate comp where shares are valued as anything more than funny money.
She didn't see a dime out of it, and was let off (together with a big chunk of people) within 6 months.
A really strange agreement where top executives of a company "join" another company for the benefit of the other company.
If it quacks like a duck...
Well, I mean, isn't that exactly what they should be doing? (I'm not talking about whether or not it benefits society; this is more along the lines of how they're incentivized.)
Put yourself in their shoes. If you had all that cash, and you're hearing people talk of an "AI Bubble" on a daily basis, and you want to try and ensure that you ride the wave without ever crashing... the only rational thing to do is use the money to try and cover all your bases. This means buying competitors and it also means diversifying a little bit.
It's just an anti-competitive move that could be very bad for the consumer as it makes the inference market less competitive.
it's not like Nvidia doesn't invest a ton into R&D, but hey, they have the cash, why not use it? like a good business.
In this case, removing a competitor, absorbing their IP, and maintain their ability to dictate the direction of an entire industry. They're hurting the industry itself by removing competition, since competition is good for consumers and also good for progression forward.
Businesses with a monopoly of some sort often stop innovating in the space and end up slowing the entire thing down. Often, they do their best to block anything and anyone that tries to do better, and effectively keep progress back in doing so, simply to maintain their position.
They're selfish self-preserving entities often driven by the same kinds of people, disregarding the harm they do in the name of profits and shareholder "value". Sure, until someone disrupts that (or they get bought out and dissolved).
I don't mean that pejoratively, I apologize for the bluntness. It's just I've been dealing with his nonsense since iPhone OS 1.0 x jailbreaking, and I hate seeing people taken advantage of.
(nvidia x macs x thunderbolt has been a thing for years and years and years, well before geohot) (tweet is non-sequitor beyond bogstandard geohot tells: odd obsession with LoC, and we're 2 years away from Changing The Game, just like we were 2 years ago)
NVIDIA isn't buying Groq.
It's a non exclusive deal for inference tech. Or am I reading it incorrectly?
> As part of this agreement, Jonathan Ross, Groq’s Founder, Sunny Madra, Groq’s President, and other members of the Groq team will join Nvidia to help advance and scale the licensed technology.
The world needs much stronger anti trust laws.
Usually antitrust is for consumers, but here I think companies like Microsoft and AWS would be the biggest beneficiaries of having more AI chip competition.
There isn't to be shared between the two techs, Groq's hardware is a like a railgun that installs all the weights into the optimal location before firing off an inference. Cerebras computer engineering more convention requiring the same data movement that GPUs struggle with optimizing.
Suspect Groq is complementary/superior to nvidia's GPUs, while it is unclear what Cerebras brings other then maybe some deals with TSMC.
No reason for antitrust action whatsoever.
For $0bn they could have sold an Nvidia-like chip for inference.
Even if this purchase causes 100 new hardware startups to be funded tomorrow, nVidia is perfectly fine with that. Let's see how many survive 5 years down the line
The near exclusive global provider of AI chips taking key employees from and “licensing” the technology of the only serious competitor while quite specifically describing it as “not acquiring Groq as a company” seems quite obviously anti-competitive, and quite clearly an attempt to frame it as not.
Can someone with better understanding dumb this down for me please?
The acquisition price of a company usually comes at a premium to the last valuation. This applies even with publicly traded companies, which is why acquisition announcements cause stock prices to pop up to some number between the last trade price and the acquisition price, proportional to how much the market thinks the acquisition is likely to go through.
The premium can make sense to the acquirer because the acquired company is worth more when combined with all of the assets and power (brand name, distribution, patents, trade secrets) of the acquiring company.
This confuses a lot of people who think the valuation of a company is equivalent to the number that would be paid to acquire it at that instant, but it’s not.
"They’ve literally told us that the plan is to get bailed out by the taxpayers"
This reminded me of how I think what's gonna happen/ is already happening is that they become too big to fail and get bailed out and the burden/loss becomes of taxpayers
So we are kind of living in a system which is reckless about finances/stability behind businesses where the system is such that all the profits are privatized but all the losses are shared/even funded by the average person
Combine in a mix of corruption in any political party to begin with and I am wondering why we don't have yet another french revolution.
A year ago it wasn't clear if they'd stay competitive but it seems they are.
All-In pundit Palihapitiya is invested in Groq as well. It is going well for friends of David Sacks.
Now imagine the LPUv2 ASIC. If it works it's worth $20B and if it doesn't it's zero. If investors think LPUv2 has a 1/3 chance of success they would buy in at $7B. Then the chip boots up and... look at that.
Or it's just a massive bubble.
and he gave me this link:
https://groq.com/newsroom/groq-and-nvidia-enter-non-exclusiv...
https://www.cnbc.com/2025/12/24/nvidia-buying-ai-chip-startu...
I expect China to want to compete with this. Simpler than full-blown Nvidia chips. Cue much cheaper and faster inference for all.
I think it’s pretty obvious at this point that Nvidia’s architecture has reached scaling limits - the power demands of their latest chips has Microsoft investing in nuclear fusion. Similar to Intel in both the pre-Core days and their more recent chips, they need an actual new architecture to move forward. As sits, there’s no path to profitability for the buyers of these chips given the cost and capabilities of the current LLM architectures, and this is obvious enough that even Nvidia has to realize it’s existential for them.
If Groq’s architecture can actually change the economics of inference and training sufficient to bring the costs in line with the actual, not speculative, benefits of LLMs, this may not be a buy-and-kill for Nvidia but something closer to Apple’s acquisition of P.A. Semi, which made the A- and M- class chips possible.
(Mind you, in Intel’s case they had to have their clocks cleaned by AMD a couple times to get them to see, but I think we’re further past the point of diminishing returns with Nvidia - I think they’re far enough past when the economics turned against them that Reality is their competition now.)
Didn't Anthropic say inference is already profitable?
This does feel a bit sad for sure, worrying whether this might hold Groq and innovation back. Reciprocally, perhaps kind of cool to see Groq get a massive funding boost and help from a very experienced chip making peer. It feels like an envious position somewhat, even with the long term consequences being so hazy. From the outside yes it looks like Nvidia solidifying their iron grasp over a market with very limited competitive suppliers, but this could help Groq, and maybe it's not on the terms we think we want right now, but could be very cool to see.
I really hope some of the rest of the markets can see what's happening, broadly, with Nvidia forming partnerships all over the place. NVLink with Intel, NVLink with Amazon's Tritanium... there's much more to the ecosystem, but just connecting the chips smartly is a huge task, is core to inter-operation. And for all we've heard of CXL, UltraAccelerator Link (UALink) and UltraEthernet (UET) it feels like very few major players are taking it seriously enough to just integrate these new interconnects & make them awesome. They remain incredible expensive & not commonly used, lacking broad industry adoption, and reserved for very expensive systems: there's a huge existential risk here that (lack of) interconnect will destroy competitors ability to get their good chips well integrated and used. The rest of the market needs more clear alarm bells going off, and needs to be making sure good interconnect is available on way more chips, get it into everyone's hands ASAP not just big customers, so that adoption & Linux nerd type folks can start building stacks that open up the future. The market risks getting left behind, if NVLink is built in everywhere and the various other fabrics never become common-place.
In some ways, it's not about eliminating a competitor. It's about eliminating all the competitors. Nvidia can use its resources to push AI ASICs farther faster than others, potentially cutting off a whole host of competitors that threaten their business. Nvidia has the hardware and software talent, the money, and the market position to give their AI ASICs an advantage. They know if they don't lean into ASICs that someone else will and their gravy train will end. So they almost certainly won't be abandoning the technology.
But that doesn't mean that it'll be good for us.
Still this they should spin that out though!
> Prior to founding Groq, Jonathan began what became Google’s Tensor Processing Unit (TPU) as a 20% project where he designed and implemented the core elements of the first generation TPU chip.
So, about ~$1,000/each? Seems pricey, even assuming all of them still use it every week/month.
The near exclusive global provider of AI chips purchasing the only serious competitors technology while quite spceficially describing it as “not an acquisition” seems a bit…
I’d love to have been in the room when that was decided. The big, exciting news doesn’t typically get announced during a major holiday week.
Kindof feel bad for Simon Edwards, lol. I wonder what the plan is for the future of Groq
I feel as if Nvidia is eating up even companies which I thought had genuine potential or anything related to AI industry whether profitable or not
Nvidia's trying its best to take all major players and consolidate into one big entity from top to bottom.
The problem with this approach imo is that long term, nvidia's stock is extremely overvalued and its still a bubble which will burst and it will take nvidia first and foremost.
The issue is that when nvidia falls, it will take the whole literal industry from top to bottom, even those companies which I thought could survive an AI burst. Long term I feel like it will have really bad impacts if nvidia continues to gobble up every company.
I am pretty sure that Nvidia might be looking at cerebras too and if they offer them a shit ton of money and cerebras gets bought. I genuinely believe that Nvidia has sort of invested in literally all pockets of any hardware related investment for AI. And when OpenAI is unable to pay Nvidia, I feel like it can all come crashing down since this whole cycle is only being possible via external investor money.
Quite obvious that Groq would get acquired. [0]
Will there be a truck full of paper money or not?
(Electronically)
It was really disappointing too because Cerebras does not provide any service reliability on their cheap plans. So I came to the conclusion that unless I could convince the client to set up an enterprise contract or something, we could not use either provider for low-latency, which we need for voice calls. I think for organizations that can afford a hefty contract that guarantees service levels, Groq and Cerebras especially are basically cheat codes for meeting latency requirements for voice. But that might not be an option for really small businesses.. although maybe I am just not a good sales person.
Media said it was crazy back then, well I think this sounds a lot crazier but hindsight is 20/20.
States are "not allowed" to regulate AI companies.
Graphcore
Tenstorrent
SambaNova
Rivos
https://www.datacenterdynamics.com/en/news/sambanova-explori...
> Groq raised $750 million at a valuation of about $6.9 billion three months ago. Investors in the round included Blackrock and Neuberger Berman, as well as Samsung, Cisco, Altimeter and 1789 Capital, where Donald Trump Jr. is a partner.
Makes it very hard not to think of this as a way to give money to the current administration. I know, this sounds conspiracy theory grade, but 20b is too much for groq.
I like the Wright Brothers, they called the first plain, "Flyer".
- The deal structure matters, and we don't have enough details yet. - If the license fee is distributed to shareholders, it goes above the liquidation preference. Anyone with common stock or options can exercise and get paid out. - The company continuing forward—I see this as great. There are discussions about it becoming just a shell, but I don't think that's the case at all. This looks like an acqui-hire for a few top people and a licensing deal for an alternative hardware approach to inference.
Let's say they keep $3–4B cash in the company. That's plenty to avoid another financing round and keep cranking on growth.
Groq and Cerebras can keep adding speed to open models while giving Nvidia key IP they can integrate into their large data center buildouts.
Also, on deal points I think could be interesting: would you negotiate this as a one-time payment license deal? I wouldn't. Maybe it's a hurdle, so it might take a while, but let's say Nvidia pushes massive investment to deploy this Groq hardware infrastructure integrated into their full stack… A. This could produce a nice royalty stream for the Groq company that still exists—benefiting all stakeholders. B. Use Nvidia's massive ability to deploy capital and hardware pipeline and add in another unit they can sell to their fat stakes customers and ultimately to cheapen and accelerate getting fast inference in the wild quickly.
And lastly, if management is smart or clever with the distribution part of this deal, maybe they convert all stock to common and squash the liquidation preference in this move. so they might have a quite compelling cap table post deal. (again hopefully structured as a distribution vs buy out) but at least pref is gone.
So employees exercise, get an exit, keep their stock—with investors already happy, liquidation preference gone, and potentially a well-capitalized future royalty stream coming from the largest market cap company in the world and the largest capex pipeline ever seen.
I'd much rather own the actual shares (fewer handcuffs) and have plenty of cash to deploy in a very capex-heavy moment.
It just seems like a win-win-win-win.
Nvidia wins new fundamentally different IP can sell to there existing customers Groq employees and stakeholders win. The open models win (big). We as AI consumers win because of cheaper, faster inference.
Common to what we all want to believe here, we’re not really in a winner take all moment here. nvdia is just taking a disproportional amount because of lack of real suitable alternatives… The base will for sure widen and expand from where we are at now, but that doesn’t mean that nvidia has to or is going or loose as part of it.
Wait, what? How is the cloud business supposed to run if Nvidia is acquiring the rights to the hardware?
This is how business works in the 21st century - once one company has a dominant position and a massive warchest they can just buy any business that has any potential of disrupting their revenue. It's literally the thesis Peter Thiel sets out in Zero To One. It works really well for that one business.
Groq will continue to operate as an independent company with Simon Edwards stepping into the role of Chief Executive Officer.
GroqCloud will continue to operate without interruption.
A free market is a regulated market. Otherwise you will end up with monopolies and a dead market.
Two ways to think about it: weight vs volume.
By weight (assuming all $100 bills):
$20,000,000,000 / $100 = 200,000,000 bills
Each bill is roughly 1g, so total mass is ~200,000 kg
A typical builder’s wheelbarrow can take about 100 kg before it becomes unmanageable
200,000 kg total / 100 kg per wheelbarrow ≈ 2,000 wheelbarrows (weight limit)
By volume:
A $100 bill is ~6.14" × 2.61" × 0.11 mm, which comes out to about 102 cm³ per bill
200,000,000 bills × 102 cm³ ≈ 20,400 m³ of cash
A standard wheelbarrow holds around 0.08 m³ (80 litres)
20,400 m³ total / 0.08 m³ per wheelbarrow ≈ 255,000 wheelbarrows (volume limit)
So,
About 2,000 wheelbarrows if you only care about weight
About 255,000 wheelbarrows if you actually have to fit the cash in
So the limiting factor isn’t how heavy the money is; it’s that the physical volume of the cash is absurd. At this scale, $20bn in $100s is effectively a warehouse, not a stack.
AI Chip Startup Groq Raises $750M at $6.9B Valuation - https://news.ycombinator.com/item?id=45276985 - Sept 2025 (5 comments)
Groq Raises $640M to Meet Soaring Demand for Fast AI Inference - https://news.ycombinator.com/item?id=41162875 - Aug 2024 (34 comments)
AI chip startup Groq lands $640M to challenge Nvidia - https://news.ycombinator.com/item?id=41162463 - Aug 2024 (12 comments)
Groq CEO: 'We No Longer Sell Hardware' - https://news.ycombinator.com/item?id=39964590 - April 2024 (149 comments)
