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Nvidia to buy assets from Groq for $20B cash

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

#361

Post by BLACKCRAB »

sigmoid10 wrote: post #313
jbkkd wrote: post #271

Earlier quoted context omitted.

I have a friend who worked in a company that got "not acquired" in a similar deal. She didn't see a dime out of it, and was let off (together with a big chunk of people) within 6 months.

As this gets more common, I think it will eventually lead to startups having a hard time attracting talent with lucrative equity compensation. It will be interesting to see how long it takes until this catches on among employees, but I already wouldn't take any positions in startups with a significant payment in equity anymore. The chances are slim that this pays out anyways, but now even when you are successful, noo…

[dead]

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

#362

Post by lumost »

petcat wrote: post #343
crote wrote: post #330

Earlier quoted context omitted.

Startups often pay a shitty salary in exchange for a decent chunk of stock options, with the implicit promise that you'll make bank if you work hard and make the company successful. Getting screwed out of your payout by such a totally-not-an-acquisition is wage theft. It's like promising a sales-related bonus at the beginning of the year, and then in December changing the metric to "AI-related sales to the CEO's golf…

Startup options are worthless. The only value most people will ever extract from a startup is the experience they had working there, and the salary that was put in their bank account. I understand that a lot of inexperienced people (like in this thread) think they're going to get rich though. No, it is not "wage theft" to not get rich when the company exits (by whatever means).

I recall having to sit through many trainings on how to value employee equity. My experience is that most startup employers try to BS what it means to convince people to value their equity at a significantly higher price than they otherwise should.

If the employer is explicitly making the employee options worthless, then they should be obligated to disclose this. Otherwise it’s trivial to engineer a corporate entity which pays the employees while “licensing” the technology from an IP holding firm. Later they can simply sell the IP holding firm without owing employees a dollar.

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

#363

Post by dTal »

xnx wrote: post #353
HPsquared wrote: post #333

Earlier quoted context omitted.

Nvidia's dream would be for everyone to buy a personal DGX H100 for private local inference. That's where open source could lead. Datacenters are much more efficient in their use of chips.

Exactly. Efficiency use of their chips is the enemy of Nvidia.

Doubt it:

https://en.wikipedia.org/wiki/Jevons_paradox

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

#364

Post by shwaj »

nl wrote: post #256
shwaj wrote: post #223

Earlier quoted context omitted.

Groq is very different from TPUs. The difference in memory should be a big clue. (Groq using SRAM built into each compute unit, vs TPUs using HBM more similarly to GPUs)

The founder created TPUs at Google. > Prior to founding Groq, Jonathan began what became Google’s Tensor Processing Unit (TPU) as a 20% project where he designed and implemented the core elements of the first generation TPU chip.

I know, so what? Very smart people might have more than one idea in their careers. He left to pursue one of those.

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

#365

Post by SilverElfin »

nickysielicki wrote: post #34

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 member…

This seems a lot like something where the acquirer avoids paying for equity. With key leaders gone what do employees of Groq get? Their company isn’t being acquired really so they just stay illiquid?

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

#366

Post by cmrdporcupine »

sigmoid10 wrote: post #313
jbkkd wrote: post #271

Earlier quoted context omitted.

I have a friend who worked in a company that got "not acquired" in a similar deal. She didn't see a dime out of it, and was let off (together with a big chunk of people) within 6 months.

As this gets more common, I think it will eventually lead to startups having a hard time attracting talent with lucrative equity compensation. It will be interesting to see how long it takes until this catches on among employees, but I already wouldn't take any positions in startups with a significant payment in equity anymore. The chances are slim that this pays out anyways, but now even when you are successful, noo…

The equity in almost all startups has already been a bait and switch for more than a decade. Most will refuse to answer you about % of equity share anyways, but if they did it's tiny tiny amounts, and in the end half the time it's up to the acquiring entity just how seriously they end up taking it. If you landed at an entity like Google (as I did from the place I was working 15+ years ago) you could be treated well. Elsewhere, not great.

During boom times it made more financial sense to go straight to a FAANG if you could.

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

#367

Post by kasey_junk »

Eridrus wrote: post #358
jbkkd wrote: post #271

Earlier quoted context omitted.

I have a friend who worked in a company that got "not acquired" in a similar deal. She didn't see a dime out of it, and was let off (together with a big chunk of people) within 6 months.

Can you say more about why mechanically she didn't get anything? If you exercise your options you have real stock in the company, so I don't see how you can get shafted here. Did investors do some sort of dividend cash out before employees were able to exercise their options? (Obviously shady, but more about investors/leadership being unethical than the deal structure). Would love to know more about how this played o…

Multiple share classes are the norm even before the new acquisition types we see here. It’s extremely common in an acquisition for employee shares to be worth nothing while investor and founder shares are paid out.

But these new “acquisitions” aren’t even that. They are not acquisitions at all. They just hire the talent directly with perhaps an ip rights agreement thrown in as a fig leaf.

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

#368

Post by isubkhankulov »

Eridrus wrote: post #358
jbkkd wrote: post #271

Earlier quoted context omitted.

I have a friend who worked in a company that got "not acquired" in a similar deal. She didn't see a dime out of it, and was let off (together with a big chunk of people) within 6 months.

Can you say more about why mechanically she didn't get anything? If you exercise your options you have real stock in the company, so I don't see how you can get shafted here. Did investors do some sort of dividend cash out before employees were able to exercise their options? (Obviously shady, but more about investors/leadership being unethical than the deal structure). Would love to know more about how this played o…

There have been at least a half dozen of these deals in the past 1-2 years including Google “licensing” CharacterAI to pull their founders back into Google as valued employees.

In the deal mentioned above: my guess is that preferred class shareholders and common shares got paid out but the common shareholders had such a low payout that it rounded down to zero for most employees.

This can happen even in a regular acquisition because of the equity capital stack of who gets paid first. Investors typically require a 1x liquidation preference (they get their investment back first no matter what).

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

#369

Post by FL33TW00D »

nl wrote: post #256
shwaj wrote: post #223

Earlier quoted context omitted.

Groq is very different from TPUs. The difference in memory should be a big clue. (Groq using SRAM built into each compute unit, vs TPUs using HBM more similarly to GPUs)

The founder created TPUs at Google. > Prior to founding Groq, Jonathan began what became Google’s Tensor Processing Unit (TPU) as a 20% project where he designed and implemented the core elements of the first generation TPU chip.

He did not "create" the TPU. He contributed to the creation of the TPU.

There are 66 authors on the original TPU paper: https://dl.acm.org/doi/10.1145/3079856.3080246

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

#370

Post by SilverElfin »

lumost wrote: post #213
gchadwick wrote: post #72

Earlier quoted context omitted.

Another example of the growing trend of buying out key parts of a company to avoid any actual acquisition? I wonder if equity holding employees get anything from the deal or indeed if all the investors will be seeing a return from this?

I wonder if such deals will create employee lawsuits. I'd certainly be looking at legal options if I was one of the founding employees.

It should. Look at what happened at Windsurf when Google did something like this

https://news.ycombinator.com/item?id=44673296

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