AI chip startup Groq announced on Monday that it has secured $640 million in a funding round led by BlackRock, Cisco, and Samsung Catalyst Fund.

This significant investment has propelled Groq's valuation to $2.8 billion, more than doubling its previous valuation of $1.1 billion from 2021.

This surge in valuation positions Groq as a formidable competitor to Nvidia in the high-end semiconductor market. Other companies like AMD are also vying for a larger market share as cloud service providers and social media platforms seek to develop their own products, reducing their dependence on Nvidia.

In their announcement, Groq stated, "The funding will be used to expand the capacity of our tokens-as-a-service (TaaS) offering and introduce new models and features to GroqCloud."

Groq's Specialization in AI Inference Chips

Groq, which should not be confused with Elon Musk's Grok AI venture, has been making strides in the AI chip industry. After Musk distanced himself from OpenAI to focus on his own projects, he introduced Grok last year to compete with OpenAI's ChatGPT.

Groq, established in 2016, had trademarked its name early on and even sent a cease-and-desist letter to Musk over the similar branding.

Both companies are staking their claim on the sci-fi-inspired name, but Groq issued a bold statement highlighting the impressive capabilities of their AI model.

Groq is advancing the development of its AI inference chips, which are essential for enhancing AI system performance. The Silicon Valley-based company has developed a language processing unit (LPU) designed for AI inference, which uses trained data to generate responses to queries.

Groq plans to deploy over 108,000 LPUs by the end of March next year.

Additionally, Groq announced the appointment of Stuart Pann as Chief Operating Officer. Pann, who previously held senior positions at Intel and HP, will be joined by Meta's top AI scientist Yann LeCun, who will serve as a technical adviser.