AI chip startup Groq has successfully secured $640 million in funding, spearheaded by Blackrock, to further its mission of developing high-speed, energy-efficient chips for generative AI models. This funding round has elevated Groq's valuation to $2.8 billion, doubling its worth from April 2021.

Founded in 2016, Groq is creating an LPU (language processing unit) inference engine, designed to run generative AI models up to 10 times faster while using one-tenth the energy compared to conventional processors. The company’s CEO, Jonathan Ross, known for inventing Google's TPU, co-founded Groq with Douglas Wightman from Alphabet’s X moonshot lab.

Groq's latest funding round saw participation from Neuberger Berman, Type One Ventures, Cisco, KDDI, and Samsung Catalyst Fund. This investment brings Groq’s total funding to over $1 billion, signaling strong confidence in its potential to disrupt the AI chip market, currently dominated by Nvidia.

Meta’s chief AI scientist Yann LeCun has joined Groq as a technical advisor, and Stuart Pann, former Intel executive, has been appointed as COO. This strategic addition is expected to bolster Groq’s competitive edge, particularly against giants like Nvidia, which holds 70-95% of the AI chip market.

Groq offers a developer platform called GroqCloud, featuring open models such as Meta’s Llama 3.1, Google’s Gemma, OpenAI’s Whisper, and Mistral’s Mixtral. GroqCloud, with over 356,000 developers, also includes an API for integrating Groq’s chips in cloud instances and a playground for AI-powered chatbots.

Stuart Pann shared that 75% of Fortune 100 companies are represented among GroqCloud’s developers. The funds will be used to scale GroqCloud’s capacity and introduce new models and features, aiming to cater to the growing demand for generative AI tools.

Groq’s strategy includes significant outreach to enterprise and government sectors. The company acquired Definitive Intelligence to form Groq Systems, targeting U.S. government agencies and other organizations looking to integrate Groq’s processors into their data centers.

Groq’s international expansion includes a partnership with Carahsoft to sell solutions to public sector clients and a collaboration with Saudi Arabia’s Aramco Digital to install LPUs in Middle Eastern data centers. The startup has also signed an LOI to install tens of thousands of LPUs at Earth Wind & Power’s Norway data center.

Looking ahead, Groq plans to deploy over 108,000 LPUs by the end of Q1 2025. The company is partnering with Samsung’s foundry to manufacture 4nm LPUs, promising significant performance and efficiency improvements over its current 13nm chips.