Santa Clara, California, is home to Nvidia’s headquarters.
Groq, a manufacturer of AI chips, has signed a nonexclusive license deal with Nvidia, which will also buy a portion of the startup’s executive staff.
Founder and CEO Jonathan Ross, President Sunny Madra, and other staff will join Nvidia (NVDA) “to help advance and scale” the licensed inference technology, Groq announced in a blog post on Wednesday. “The agreement reflects a shared focus on expanding access to high-performance, low-cost inference,” Groq stated.
Citing Alex Davis, CEO of the investment firm Disruptive, which spearheaded Groq’s most recent funding round, CNBC had earlier reported that Nvidia was purchasing Groq altogether for roughly $20 billion.
However, the deal seemed to be overstated in that article. According to Groq, CFO Simone Edwards will take over as CEO, GroqCloud will continue to function normally, and Groq will remain an independent business. A Groq representative cited the company’s blog post when questioned about the apparent confusion, stating that it “includes the factual terms of the agreement.”
A representative for Nvidia also mentioned Groq’s blog post specifics.
A request for comment from Disruptive was not immediately answered.
The transaction seems to be “strategic in nature” for Nvidia, according to a note released Wednesday night by Bernstein analysts lead by Stacy Rasgon. Although inference workloads are more varied and might potentially create new markets for competitors, the company is now the undisputed leader in AI training. Therefore, we believe it makes sense to invest funds (even $20 billion) to add new capabilities and strengthen an already dominant position as inference scales.
During Friday’s premarket trade, Nvidia’s shares increased by 0.8%. Through Wednesday, it has increased 40.5% in 2025, while the S&P 500 index SPX has increased 17.9%.
Additional reading: What to expect from Nvidia in 2026
