NVIDIA announced it has agreed to license artificial intelligence chip technology from startup Groq. The company also revealed it will hire Groq founder and CEO Jonathan Ross, along with senior executives and engineers.

The announcement was made in a Groq blog post on Wednesday. A person close to NVIDIA confirmed the licensing agreement, as reported by Reuters.

The deal reflects a growing trend in the technology sector. Large companies increasingly license technology and hire talent from startups without completing full acquisitions.

Groq focuses on AI inference. This is the process where trained artificial intelligence models respond to user requests. NVIDIA dominates AI training. However, inference is a more competitive market. Rivals include Advanced Micro Devices, along with startups such as Groq and Cerebras Systems.

Groq said NVIDIA has agreed to a non exclusive license to its technology. Ross, who helped build Google’s AI chip program, will join NVIDIA. Groq President Sunny Madra and several engineers will also move to NVIDIA.

At the same time, Groq announced it will continue operating as an independent company. Simon Edwards has been named CEO. The company also confirmed that its cloud business will continue operating.

Financial details were not disclosed. However, CNBC reported that NVIDIA had agreed to acquire Groq for $20 billion in cash. Neither NVIDIA nor Groq commented on the CNBC report.

Similar deals have taken place across the industry. Microsoft brought in its top AI executive through a licensing deal with a startup. Meta hired the CEO of Scale AI without acquiring the firm. Amazon hired founders from Adept AI. NVIDIA completed a similar transaction earlier this year.

Groq recently more than doubled its valuation to $6.9 billion. This followed a $750 million funding round completed in September. The company was valued at $2.8 billion in August last year.

Groq designs AI chips that do not rely on external high bandwidth memory. Instead, it uses on chip SRAM memory. This approach helps speed up chatbot and AI model responses. However, it also limits the size of models that can be supported.

Cerebras Systems is Groq’s main rival using a similar architecture. The company plans to go public as early as next year. Both Groq and Cerebras have signed major AI deals in the Middle East.

Earlier this year, NVIDIA CEO Jensen Huang said the company expects to maintain its leadership as AI demand shifts from training toward inference.

Source, Reuters

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