Nvidia is set to acquire AI chip startup Groq in a deal valued at about $20 billion, sources close to the matter said. If completed, the transaction would rank among the largest in the semiconductor industry focused on artificial intelligence technology.

Groq, founded by former engineers from a major AI chip maker, has developed specialised processors designed to accelerate machine learning and inference workloads. Its chips have attracted attention for performance in large-scale AI deployments, particularly in data centres and cloud computing environments.

Nvidia, known for its dominant position in graphics processing units (GPUs) widely used for AI training and inference, has been expanding its capabilities beyond traditional architectures. The acquisition of Groq’s technology and talent is expected to help Nvidia strengthen its footprint in custom AI accelerators and diversify its product portfolio amid rising demand for specialised hardware.

Industry analysts said the deal reflects the intensifying race among technology companies to secure advanced AI hardware, as organisations increasingly rely on powerful compute resources for generative AI, natural language processing, and large model training.

A person familiar with the discussions said, “Combining Groq’s focused silicon designs with Nvidia’s broader ecosystem could accelerate innovation in AI hardware.”

The agreement is subject to regulatory approvals and customary closing conditions. Upon completion, Nvidia is likely to integrate Groq’s intellectual property and engineering teams into its broader AI development efforts, while continuing to serve customers expanding their AI infrastructure.

The transaction underscores the strategic importance of AI semiconductors as demand surges across cloud providers, enterprises, and research institutions seeking greater computational efficiency and performance.

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