Mr Kwok already analysed these deals and gave them a nice little acronym: HALO
Nvidia's $20B antitrust loophole
81–90 of 184 posts
Re: Nvidia's $20B antitrust loophole
#82Nvidia bought groq? I am out of the loop but what does groq have that they want?
A chip dedicated to inferencing that's better than their GPUs.
Re: Nvidia's $20B antitrust loophole
#83I don't think you can treat owners of the same shares differently in the way this is suggesting. The VC shareholders and the employee shareholders are probably on equal footing and getting the same price. VCs will own preferred but I doubt that is enough to windfall them at the expense of the common shareholders. So if VCs are getting paid a certain share price, employees with vested stock almost certainly are gettin…
Yes I think you are right here. The purchase price is high enough for all parties to be get return on their shares, and whilst there will be a waterfall for who gets paid first, I doubt many people will be unhappy with this deal. Unlike Windsurf... who's 2nd employee only got 1% of what their shares were worth ( https://news.ycombinator.com/item?id=44673296 )
Doesn’t this depend on how the ip was structured? If it was kept as a separate entity, or the firm named ownership of the ip in nonstandard terms, then they could pay investors but not employees.
Unfortunately, we could likely find thousands of different ways not to pay employees given they don’t have board seats, and are typically on non standard equity.
Re: Nvidia's $20B antitrust loophole
#84So... What will the actual impact on groq services be?
I'm a fan, and I use Groq a lot for systems I build. I think they offer something different to most other providers (cheaper, faster, and until recently "we don't store your data by default") and it will be sad to see that fade.
Re: Nvidia's $20B antitrust loophole
#85This behavior is extremely damaging to the startup scene. Who would join a startup these days unless it’s run by a close friend or relative? At least in that case, the scorned junior employees would have social recourse.
Oh FFS 0.1% of this acquisition is $20M. 0.5% is $100M. Junior to senior equity lies in this range. They'll be more than fine. They'll be 1%ers to 0.1%ers after taxes, yeesh. It's never ever enough. is it?
Those numbers are not realistic. At a company at this stage (series E I think?), you’ll be lucky to have 0.01% as an engineer.
Most importantly, there is no guarantee there will be any payout at all. It’s not an acquisition and we don’t know the terms.
Re: Nvidia's $20B antitrust loophole
#86> Groq built the region's largest inference cluster in eight days in December 2024. From that Dammam facility, GroqCloud serves "nearly four billion people regionally adjacent to the KSA." This isn't API access. This is critical AI infrastructure for a nation-state, funded by the Public Investment Fund, processing inference workloads at national scale.
Maybe I'm just completely out of touch, and hardware has never been my expertise, but does it take O(days) and not O(years) to build data centers these days? I know Grok DCs in Memphis were built under a year cutting many corners and using plenty loopholes, but even by those standards, bringing up a full data center in just over a week sounds impossible without some insane construction automation to me.
Re: Nvidia's $20B antitrust loophole
#87I don't think you can treat owners of the same shares differently in the way this is suggesting. The VC shareholders and the employee shareholders are probably on equal footing and getting the same price. VCs will own preferred but I doubt that is enough to windfall them at the expense of the common shareholders. So if VCs are getting paid a certain share price, employees with vested stock almost certainly are gettin…
Yes I think you are right here. The purchase price is high enough for all parties to be get return on their shares, and whilst there will be a waterfall for who gets paid first, I doubt many people will be unhappy with this deal. Unlike Windsurf... who's 2nd employee only got 1% of what their shares were worth ( https://news.ycombinator.com/item?id=44673296 )
i thought so at first, but I did some digging and changed my mind. it's possible the following is how it goes:
- secondary transaction with the preferred shareholders (VCs) at some price that implies a 20b valuation
- founders quit and get new employment agreements
- some cash is transferred to the company as a license fee
- no acquisition means no DOJ approval
in this scenario the headline can be $20b but the cash expense can be much lower, you have full flexibility to direct whatever cash or equity you want to founders vs the rest of the company, as an up front payment or as retention/salary, and the founders have no hinderance from working on anything they touched at previous company because of IP license.
I actually bet this is how it went down. This is becoming the standard in the industry and it's just awful for the future of SV
Re: Nvidia's $20B antitrust loophole
#88Earlier quoted context omitted.
I thought this was always the case? Hearing about examples certainly isn't new.
It has always been the case, but each year there’s a fresh crop of new, bright-eyed 20-year-olds who haven’t learned it yet. The entire startup ecosystem essentially depends on the fact that some people haven’t yet internalized that options are worthless and working 80+-hour weeks if you’re employee #3 or higher never pays off, because even in the slim chance your company has a successful exit you’ll get fucked over…
It hasn't actually always been the case and the real issue is the false advertising that you actually have equity. If my equity of 1% was real then I would get value as the company grew but the reality is that options/shares without some sort of exit is worth 0. Founders and the C suite often (always now?) get 'internal' raises meaning when a new round of funding hits they get to sell but nobody else does. This, to me, completely destroys the concept that equity is an incentive to build the company and means it should -never- be used as part of a hiring pitch since the people pitching it, founders and the upper management, obviously don't believe in it themselves. If you really want to see if the leadership believes in the junk they are telling you then ask them to put in writing that internal raises are available to all at the same percentages or they are available to nobody.
Re: Nvidia's $20B antitrust loophole
#89> GroqCloud will wind down over 12-18 months. They'll either get laid off or jump ship to wherever they can land. They built the LPU architecture, contributed to the compiler stack, supported the infrastructure, and got nothing while Chamath made $2B. This is depressing.
That’s just it. We’ve entered a new era. Big companies don’t need your startup. They only need your smart guys. Just those few guys. You keep the rest of your engineers and figure out what to do with them. And lately, the answer has been, “wind it all down”. This sucks so bad for most of their employees. But it’s a signal to the labor market: Be very honest about what you are when you’re considering working at an AI…
Nvidia didn't buy Groq because they need any "smart guys" at all.
Re: Nvidia's $20B antitrust loophole
#90> Groq built the region's largest inference cluster in eight days in December 2024. From that Dammam facility, GroqCloud serves "nearly four billion people regionally adjacent to the KSA." This isn't API access. This is critical AI infrastructure for a nation-state, funded by the Public Investment Fund, processing inference workloads at national scale. Maybe I'm just completely out of touch, and hardware has never be…
they are likely referring to their hardware deployment. Which can be done in days. The datacenter is owned and operated by someone else and they just bring in the racks.