Groq is soliciting up to $650 million in new capital from its current shareholders, according to a person familiar with the situation. The fundraising comes after the AI chip company executed a $17 billion licensing agreement with Nvidia in December, proceeds from which have been used to distribute cash to investors.
The company has been repositioning away from a hardware-centric model and toward AI inferencing - the part of the stack that enables trained models to respond to user prompts. That shift forms the background for the current capital raise and the creation of a follow-on entity.
Sources indicate that investors have already received earlier payouts tied to the Nvidia transaction and that a final cash distribution is expected soon as part of the same arrangement. Once the remaining distributions are completed, existing shareholders will be offered the chance to invest in a new company referred to by some backers as Groq 2.0.
Current investors are being asked to participate in that next-stage vehicle. Two of Groq's backers, Disruptive and Infinitum, have agreed to backstop the $650 million offering in the event it is not fully subscribed by existing shareholders, according to the same person familiar with the matter.
Separately, Nvidia is reported to be preparing a version of Groq AI chips that would be suitable for sale in the Chinese market. That development was disclosed in March and adds an additional element to the evolving commercial landscape around Groq's technology and licensing arrangements.
Context and mechanics
The raise is structured as a capital round aimed exclusively at existing investors rather than an open, public offering. The backstop commitments from Disruptive and Infinitum mean the round has a predefined floor of support if subscription from current holders is incomplete.
What investors are being asked to do
After receiving the remaining cash distributions tied to the Nvidia licensing deal, shareholders will be invited to allocate fresh capital into the new company. The invitation follows the repositioning of Groq toward inferencing software and services rather than a primary focus on manufacturing chips.
Details on valuation, timing and the specific governance of the new company were not disclosed by the person familiar with the matter.