Uh oh, not good that a major Nvidia competitor with genuine alternative technology will no longer be competing... Chances this tech gets killed post-acquisition?
> Groq is expected to alert its investors about the deal later on Wednesday. While the acquisition includes all of Groq’s assets, its nascent Groq cloud business is not part of the transaction, said Davis.
Wait, what? How is the cloud business supposed to run if Nvidia is acquiring the rights to the hardware?
The business model at Groq basically morphed over time so the internal cloud was their only client and all purchases were on some revenue sharing basis to finance set up and operate the cloud business. So this has a bigger impact on those Cloud hardware operators to the extent they were involved in the discussions with Nvidia. Saudi Aramco comes to mind, as an early big check investor, who hosts much of the Groq Cloud today. So now Nvidia is their sole source supplier and the whole Tokens-as-a-Service business model they signed up for is re-negotiated ?
I just stopped my Groq API. Sad to see competition being eaten up by shitty Nvidia. I like their products but Jensen is an absolute mfer with deceitful marketing.
As a relative laymen in this hardware inference space, I am curious what exactly was Groq useful for vs. the typical hardware architecture? Or was this a “step in before they become more generally useful” situation for Nvidia/Groq?
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.
> 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.
> 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.
A really strange agreement where top executives of a company "join" another company for the benefit of the other company.
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?
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.
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.)
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
…except they are a rather small hardware startup, there is a dozen other rather small hardware startups they did not buy, and there will be more such startups funded just on the news that NVIDIA bought one at a big premium.
The acquisition price of a company usually comes at a premium to the last valuation. This applies even with publicly traded companies, which is why acquisition announcements cause stock prices to pop up to some number between the last trade price and the acquisition price, proportional to how much the market thinks the acquisition is likely to go through.
The premium can make sense to the acquirer because the acquired company is worth more when combined with all of the assets and power (brand name, distribution, patents, trade secrets) of the acquiring company.
This confuses a lot of people who think the valuation of a company is equivalent to the number that would be paid to acquire it at that instant, but it’s not.
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[ 2.0 ms ] story [ 77.4 ms ] threadQuite obvious that Groq would get acquired. [0]
[0] https://news.ycombinator.com/item?id=39438820
Wait, what? How is the cloud business supposed to run if Nvidia is acquiring the rights to the hardware?
It should be noted that Don Jr. is one of the investors who will benefit greatly if/when this goes through.
Will there be a truck full of paper money or not?
> 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.
A really strange agreement where top executives of a company "join" another company for the benefit of the other company.
If it quacks like a duck...
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.
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.)
A free market is a regulated market. Otherwise you will end up with monopolies and a dead market.
Can someone with better understanding dumb this down for me please?
The acquisition price of a company usually comes at a premium to the last valuation. This applies even with publicly traded companies, which is why acquisition announcements cause stock prices to pop up to some number between the last trade price and the acquisition price, proportional to how much the market thinks the acquisition is likely to go through.
The premium can make sense to the acquirer because the acquired company is worth more when combined with all of the assets and power (brand name, distribution, patents, trade secrets) of the acquiring company.
This confuses a lot of people who think the valuation of a company is equivalent to the number that would be paid to acquire it at that instant, but it’s not.
A year ago it wasn't clear if they'd stay competitive but it seems they are.