Groq eyes $6 billion valuation after $1.5 billion Saudi AI chip deal

Groq is a U.S. semiconductor startup that makes special AI chips used for running AI tasks very fast. The company is talking to investors to raise $300 million to $500 million. If this works out, Groq's valuation would go up to $6 billion after the investment.

The money is needed to deliver on a deal with Saudi Arabia that was signed recently. Back in February 2024, Saudi Arabia promised $1.5 billion to help Groq deliver more of its AI chips to them, according to the report by Reuters.

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Saudi deal could bring big money

Groq told investors that its Saudi contracts could make them $500 million in revenue this year. In August 2023, Groq raised $640 million in a big funding round. That round was led by Cisco Investments, Samsung Catalyst Fund, and BlackRock Private Equity Partners, and Groq's valuation became $2.8 billion at that time, as stated in the reports.

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Groq is based in Silicon Valley and is known for making AI inference chips — chips that are really good at running pre-trained AI models super fast. Groq didn’t reply when Reuters asked for a comment, as mentioned in the report by Reuters.

FAQs

Q1. Why is Groq raising more money now?
To fund its new $1.5 billion AI chip deal with Saudi Arabia.

Q2. How much is Groq worth after new investment?
Groq may be valued at $6 billion post-investment.