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Nvidia to buy assets from Groq for $20B cash

cnbc.com

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Re: Nvidia to buy assets from Groq for $20B cash

#34

Post by nickysielicki »

Groq press release: https://groq.com/newsroom/groq-and-nvidia-enter-non-exclusiv...

> Today, Groq announced that it has entered into a non-exclusive licensing agreement with Nvidia for Groq’s inference technology. The agreement reflects a shared focus on expanding access to high-performance, low cost inference.

> As part of this agreement, Jonathan Ross, Groq’s Founder, Sunny Madra, Groq’s President, and other members of the Groq team will join Nvidia to help advance and scale the licensed technology.

> Groq will continue to operate as an independent company with Simon Edwards stepping into the role of Chief Executive Officer.

> GroqCloud will continue to operate without interruption.

Re: Nvidia to buy assets from Groq for $20B cash

#36

Post by fancyfredbot »

The price is 40x their target revenue. That's twice the price to revenue multiplier applied to Anthropic in their most recent funding round, and really really hard to portray as a good deal.

I don't think it really helps Nvidia's competitive position. The serious competition to Nvidia is coming from Google's TPU, Amazon's Trainium, AMD's Instinct, and to a much lesser extent Intel's ARC.

Grow recent investors got back a 3x multiple and may now invest in one of Nvidia's other competitors instead.

Re: Nvidia to buy assets from Groq for $20B cash

#38

Post by A_D_E_P_T »

nusl wrote: post #32

Legit feels like Nvidia just buying out competition to maintain their position and power in the industry. I sincerely hope they fall flat on their face.

> Legit feels like Nvidia just buying out competition to maintain their position and power

Well, I mean, isn't that exactly what they should be doing? (I'm not talking about whether or not it benefits society; this is more along the lines of how they're incentivized.)

Put yourself in their shoes. If you had all that cash, and you're hearing people talk of an "AI Bubble" on a daily basis, and you want to try and ensure that you ride the wave without ever crashing... the only rational thing to do is use the money to try and cover all your bases. This means buying competitors and it also means diversifying a little bit.

Re: Nvidia to buy assets from Groq for $20B cash

#39

Post by roughly »

The absolute best case I can make for this:

I think it’s pretty obvious at this point that Nvidia’s architecture has reached scaling limits - the power demands of their latest chips has Microsoft investing in nuclear fusion. Similar to Intel in both the pre-Core days and their more recent chips, they need an actual new architecture to move forward. As sits, there’s no path to profitability for the buyers of these chips given the cost and capabilities of the current LLM architectures, and this is obvious enough that even Nvidia has to realize it’s existential for them.

If Groq’s architecture can actually change the economics of inference and training sufficient to bring the costs in line with the actual, not speculative, benefits of LLMs, this may not be a buy-and-kill for Nvidia but something closer to Apple’s acquisition of P.A. Semi, which made the A- and M- class chips possible.

(Mind you, in Intel’s case they had to have their clocks cleaned by AMD a couple times to get them to see, but I think we’re further past the point of diminishing returns with Nvidia - I think they’re far enough past when the economics turned against them that Reality is their competition now.)

Re: Nvidia to buy assets from Groq for $20B cash

#40

Post by yoan9224 »

this is genuinely sad, groq had really fast inference and was a legit alternative architecture to nvidia's dominance. feels like we're watching consolidation kill innovation in real time. really hoping regulators actually look at this one but not holding my breath
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