No shade but most other coverage will focus on whether this signals an AI bubble. That's missing the story.
Nvidia explicitly did NOT acquire Groq. They licensed the IP and hired the talent. This structure dodges CFIUS review (Groq had $1.5B in Saudi government contracts), antitrust scrutiny, and years of regulatory delays.
The $13B premium over the September valuation was the cost of regulatory arbitrage. Announced Christmas Eve while Trump's AI Czar (Chamath's All-In podcast co-host) is in office. Chamath's Social Capital made AT LEAST ~$2B on this exit.
My article breaks down: what Nvidia actually bought vs what they left behind, why the deal structure matters, who got paid, and the political connections nobody's talking about.
So many companies doing non-"acquisitions" during this AI boom!
Though this one is at least more comprehensive than say, Google simply hiring back Noam Shazeer from Character.AI or OpenAI taking Windsurf
I think it's important to note that there's nothing forbidding LPU style determinism from being used in training. They just didn't make that choice.
Also tenstorrent could be a viable challenger in this space. It seems to me that their NoC and their chips could be mostly deterministic as long as you don't start adding in branches
This 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.
I wonder how the startup scene will adjust to this if it becomes mainstream. can employee contracts be modified to force compensation even in this case? seems difficult to write one up without weird second order effects.
if this does end up being something that is legal and successfully circumvents anti trust, does it mean antitrust actually is a failure in practice?
2026 hasn't even begun and more shenanigans are in flight.
IANAL, and am especially weak on US law, but I suspect this is only an antitrust loophole if the administration chooses not to act. Substance over form must apply? Pretty sure this wouldn't fly in European law.
The part I don’t fully understand is: could this non-acquisition eventually make the deal less than ideal for Nvidia?
Is it really a given that GroqCloud is going to be sunset and the company will die?
Couldn’t this company hire talent and continue to operate and maybe even innovate? Couldn’t Groq even hire back some employees from Nvidia? If any of them live in California there’s nothing stopping them and they have a bunch of cash from Nvidia. There are all kinds of loopholes for that like contracting arrangements.
Nvidia doesn’t really have exclusive access to any part of the company. They didn’t necessarily remove a competitor, though I’ll grant that they likely did in practice.
It’s potentially possible that the regulations did their job and kept a competitor on the market, though again I imagine this is my naevity speaking and that the most likely outcome is that Groq will wither.
I also don’t fully understand if the Saudis are getting cashed out or not. Are they really going to roll over and allow their Saudi AI data center to become worthless? I would think they have a lot of motivation after this deal to make sure Groq still operates and serves their goals.
Read the article and where it talks about accelerated vesting of Groq shares for both the leadership team that goes to Nvidia and the regular employees that stay at Groq. Is that even guaranteed? It's not an IPO or an acquisition, so why would vesting schedules change?
> The "non-exclusive" label is legal fiction. When you acquire all the IP and hire everyone who knows how to use it, exclusivity doesn't matter.
I have some doubts about this point. IP is IP, independent of the people who invented it. If a different hardware company were to also pay for a non-exclusive IP license, maybe it will just take a few months to catch up. It’s like inheriting a codebase written by another team, and there will be some pain and some time needed to integrate it.
In fact if GroqCloud wishes to survive, it should very well just attract licensees for its IP and collect license fees for the foreseeable future.
Matthew Berman (youtuber) mentioned he's invested in groq and found out same time as everyone else. Guessing he's a small/indirect investor but still telling
I 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 getting the same price. And probably employees with vested options can either exercise now or will just get paid the net during the transaction.
Yes, the company is probably doomed so people staying there are not doing well, but they also just got paid a 3x premium on their vested equity.
> Most production AI applications aren't running 405B models. They're running 7B-70B models that need low latency and high throughput.
Really? At least for LLMs, most actual usage is concentrated on huge SOTA models. 1 trillion parameters or more. And LLMs seem to be the lion's share of AI compute demand.
Also worth thinking a about the private equity market scene, groq was afaik tradable be it thinn liquidity on platforms like equityzen. What did those shareholders get?
A la carte in AI is going to be the name of the game for a couple reasons:
- Avoids regulatory scrutiny (for now at least)
- Nobody is actually entrenched enough for customers to matter
- Weird "celebrity" culture in tech, and AI especially. Everyone is looking for a "whisperer" or a "godfather" or whatever.
- Investors still get paid out
Smart operational talent will probably adapt by demanding higher salary, signing bonuses, severance packages in lieu of equity. Distribution of the true "lottery tickets" will get more uneven.
> 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.
What is keeping Google/Amazon/Microsoft from licensing Groq’s tech? Sans people to be sure but at substantially reduced price. The Groq Cloud people should owe no allegiance to Ross.
BTW, the FA says Nvidia bought the patents. That’s probably an overstatement. Grow said non-exclusive licensing and Nvidia hasn’t said anything.
I think Nvidia licensed the IP and ‘bought’ (handcuffed) the people.
49 comments
[ 2.9 ms ] story [ 45.6 ms ] threadNvidia explicitly did NOT acquire Groq. They licensed the IP and hired the talent. This structure dodges CFIUS review (Groq had $1.5B in Saudi government contracts), antitrust scrutiny, and years of regulatory delays.
The $13B premium over the September valuation was the cost of regulatory arbitrage. Announced Christmas Eve while Trump's AI Czar (Chamath's All-In podcast co-host) is in office. Chamath's Social Capital made AT LEAST ~$2B on this exit.
My article breaks down: what Nvidia actually bought vs what they left behind, why the deal structure matters, who got paid, and the political connections nobody's talking about.
In the meantime, Musk and Chamath have the gall to complain about the kleptocracy in democratic states and the poor suppressed billionaires:
https://xcancel.com/elonmusk/status/2005287147507769442#m
I wonder when Chamath will sit again on Tucker Carlson and tell a sob story about having self doubts.
Also tenstorrent could be a viable challenger in this space. It seems to me that their NoC and their chips could be mostly deterministic as long as you don't start adding in branches
Nvidia to buy assets from Groq for $20B cash
https://news.ycombinator.com/item?id=46379183
if this does end up being something that is legal and successfully circumvents anti trust, does it mean antitrust actually is a failure in practice?
2026 hasn't even begun and more shenanigans are in flight.
Is it really a given that GroqCloud is going to be sunset and the company will die?
Couldn’t this company hire talent and continue to operate and maybe even innovate? Couldn’t Groq even hire back some employees from Nvidia? If any of them live in California there’s nothing stopping them and they have a bunch of cash from Nvidia. There are all kinds of loopholes for that like contracting arrangements.
Nvidia doesn’t really have exclusive access to any part of the company. They didn’t necessarily remove a competitor, though I’ll grant that they likely did in practice.
It’s potentially possible that the regulations did their job and kept a competitor on the market, though again I imagine this is my naevity speaking and that the most likely outcome is that Groq will wither.
I also don’t fully understand if the Saudis are getting cashed out or not. Are they really going to roll over and allow their Saudi AI data center to become worthless? I would think they have a lot of motivation after this deal to make sure Groq still operates and serves their goals.
I have some doubts about this point. IP is IP, independent of the people who invented it. If a different hardware company were to also pay for a non-exclusive IP license, maybe it will just take a few months to catch up. It’s like inheriting a codebase written by another team, and there will be some pain and some time needed to integrate it.
In fact if GroqCloud wishes to survive, it should very well just attract licensees for its IP and collect license fees for the foreseeable future.
Matthew Berman (youtuber) mentioned he's invested in groq and found out same time as everyone else. Guessing he's a small/indirect investor but still telling
So if VCs are getting paid a certain share price, employees with vested stock almost certainly are getting the same price. And probably employees with vested options can either exercise now or will just get paid the net during the transaction.
Yes, the company is probably doomed so people staying there are not doing well, but they also just got paid a 3x premium on their vested equity.
Really? At least for LLMs, most actual usage is concentrated on huge SOTA models. 1 trillion parameters or more. And LLMs seem to be the lion's share of AI compute demand.
Any employees of those companies lurking here? I'm curious how the morale is now.
- Avoids regulatory scrutiny (for now at least)
- Nobody is actually entrenched enough for customers to matter
- Weird "celebrity" culture in tech, and AI especially. Everyone is looking for a "whisperer" or a "godfather" or whatever.
- Investors still get paid out
Smart operational talent will probably adapt by demanding higher salary, signing bonuses, severance packages in lieu of equity. Distribution of the true "lottery tickets" will get more uneven.
This is depressing.
BTW, the FA says Nvidia bought the patents. That’s probably an overstatement. Grow said non-exclusive licensing and Nvidia hasn’t said anything.
I think Nvidia licensed the IP and ‘bought’ (handcuffed) the people.
Nvidia to buy assets from Groq for $20B cash - https://news.ycombinator.com/item?id=46379183 - Dec 2025 (400 comments)
Nvidia just paid $20B for a company that missed its revenue target by 75% - https://news.ycombinator.com/item?id=46403041 - Dec 2025 (133 comments)
Sounds like the media is truly the one in charge.