U.S.-based semiconductor startup Groq is in talks to raise between $300 million and $500 million in fresh funding, aiming for a post-money valuation of $6 billion, according to a report by The Information.
The capital is expected to support a major contract with Saudi Arabia, which committed $1.5 billion in February to deploy Groq’s advanced AI chips across the Kingdom. The company has told investors it could generate up to $500 million in revenue this year thanks to the Saudi deal.
Groq, founded in Silicon Valley, specializes in AI inference chips designed to efficiently execute commands from large pre-trained models — a space currently dominated by Nvidia. In a push to compete, Groq has reportedly adapted Meta’s open-source chatbot, LLaMA, to run on its hardware, signaling a broader ambition to power next-gen generative AI systems.
Groq did not respond to Reuters’ request for comment.
This funding round follows its August 2024 Series D raise of $640 million, backed by Cisco Investments, Samsung Catalyst Fund, and BlackRock Private Equity Partners. That round had pegged Groq’s valuation at $2.8 billion — meaning the company’s valuation has more than doubled in under a year.
With the AI hardware race accelerating, especially in regions like the Gulf, Groq’s rapid scale-up underscores investor appetite for Nvidia challengers in global markets.