Groq has raised $350 million as it continues shifting from building its own AI chips to operating cloud infrastructure powered by Nvidia systems. The Series A values Groq at $3.5 billion and was led by investment firm Disruptive, with Nvidia planning to participate.
Groq announced the funding as it works to expand its AI inference cloud and serve customers seeking medium and larger Nvidia-accelerated computing clusters for training and inference. The company currently operates 13 data centers across North America, Europe, the Middle East and Asia Pacific, serving more than 6 million developers, enterprises and AI-native companies.
The $3.5 billion valuation is below the $6.9 billion valuation Groq reached in September 2025. A company spokesperson told TechCrunch that Groq does not consider the financing a down round, describing it instead as a new valuation for the company following its licensing agreement with Nvidia.
Groq Shifts From AI Chips to Cloud Infrastructure
Groq originally focused on developing language processing units, or LPUs, designed to compete with Nvidia hardware for inference workloads. Its direction changed after Nvidia hired founder and CEO Jonathan Ross and other senior employees as part of a $20 billion licensing agreement that paid proceeds to Groq investors.
Groq subsequently shifted from operating primarily as an AI chip developer to becoming a cloud and data center provider running Nvidia systems. The company raised another $650 million in June to support that transition.
Groq plans to increase its infrastructure capacity from 54 megawatts to more than 200 megawatts in 2027. Alex Davis, Groq’s chairman and CEO of Disruptive, said the company is focused on building an AI inference cloud as demand for real-time AI computing grows.
Nvidia Maintains a Growing Role in Neocloud Infrastructure
Groq’s new business model places it within Nvidia’s wider AI infrastructure network. Nvidia supplies GPUs to cloud providers including CoreWeave, Lambda and Nebius and has also invested billions of dollars in some companies operating large AI computing clusters.
The neocloud model requires significant spending on data centers and computing hardware. CoreWeave, for example, reported strong second-quarter revenue growth and secured major contracts with companies including Meta and Anthropic, while investors continued to focus on its capital expenditures, debt levels and exposure to hardware depreciation.
Groq does not publicly disclose its financial results. Its latest funding will support further infrastructure expansion as the company increases access to Nvidia-based computing capacity for AI training and inference customers.
Featured image credits: Magnific.com
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