Groq is focusing on its inference neocloud business, which relies on homegrown AI chips and systems, and is seeking to raise $650 million in new funding from existing investors, sources told Axios.
In December, Groq reportedly inked one of its non-acquisition deals with Nvidia for $20 billion, which included the departure of some of Groq’s top senior employees to the chip giant and the licensing of Groq’s hardware technology to Nvidia. The deal was good news for the startup’s investors, as it would have been Nvidia’s largest acquisition price in cash if the deal were an outright acquisition, Axios reported.
Now, these investors are being asked to back and support the company’s plans to grow its inference cloud business, which allows developers and businesses to host apps that require inference. Inference is what happens after an AI prompt, and is currently a much bigger need in the AI world than training a model.
The new direction is currently being led by Adam Winter and Matt Eng, Groq’s interim CEO and CFO, respectively.
In a sense, the $650 million in funding is guaranteed. Axios reports that Groq backers Disruptive and Infinitium have agreed to participate in the round if other existing investors do not want pro rata shares.
