Nvidia strikes $20B deal to license assets, hire executives from AI chip startup Groq

Brian Sullivan (Senior National Correspondent) 00:00.350

nvidia striking a twenty billion dollar deal the licensed technology from the AI chip firm grok G R O Q and higher away some of its top executives mackenzie sagalos has more in today's tech check back

Mackenzie Sigalos (Business News Correspondent) 00:14.870

hey brian so nvidia 's dominance in AI chips is so big that the next moves are about locking in what comes after GPU 's now this grok agreement it brings over the founder key leaders and the company 's IP three months ago grok raised at a six point nine billion dollar valuation

Mackenzie Sigalos (Business News Correspondent) 00:30.150

so this is close to a three X premium and by far nvidia 's largest deal yet nvidia is calling it a licensing agreement not an acquisition the cloud business stays independent but it's the same playbook that microsoft google and amazon have used to scoop up AI talent without

Mackenzie Sigalos (Business News Correspondent) 00:45.670

triggering regulatory reviews now nvidia it is sitting on sixty billion dollars in cash up from thirteen billion two years ago so they can afford to pay up and in fact they have been looking for places to park that cash so the real question is why use it for a company that just

Mackenzie Sigalos (Business News Correspondent) 01:00.270

slashed its twenty twenty five revenue projections by seventy five percent and the answer comes down to chip design grock 's chips keep data closer to the compute on the processor itself rather than shuttling it to separate memory chips nvidia 's gpus rely heavily on high

Mackenzie Sigalos (Business News Correspondent) 01:15.270

bandwidth memory as supply chain controlled by just a handful of firms so this deal could ease that bottleneck while helping nvidia design cheaper more power efficient server chips for running AI applications but there's also another way to read this gil loria from DA davidson

Mackenzie Sigalos (Business News Correspondent) 01:30.590

told me that this looks like an entirely defensive deal nvidia wanted to make sure that technology that could challenge its lead didn't end up in the hands of broadcom or AMD nvidia controls roughly ninety percent of the AI chip market and faces antitrust scrutiny in the EU UK

Mackenzie Sigalos (Business News Correspondent) 01:46.910

and china so this let's them add capabilities while avoiding the M and a spotlight and it eliminates one of the few credible competitors trying to chip away at its dominance in running inference workloads guys

? (?) 01:59.710

mac that's exactly where is gonna go with you are there other competitors to grok with a cue in this marketplace could we see more M and A or more exotic deal making if you will in light of this

Mackenzie Sigalos (Business News Correspondent) 02:11.710

well we know that intel is looking to make an acquisition on that front as it beefs up its chip program and what's so fascinating about this deal in particular is the fact that the brock CEO and founder jonathan ross isn't just any founder he helps build googles tpu which has

Mackenzie Sigalos (Business News Correspondent) 02:25.670

become nvidia 's most credible competition google stock that's up sixty five percent this year and the tpu is a big part of that story and why it's been landing these major deals with anthropic and meta and now the guy who designed that architecture is going to nvidia

Brian Sullivan (Senior National Correspondent) 02:41.710

do tpu 's kill gpus

Mackenzie Sigalos (Business News Correspondent) 02:44.830

TV use are essentially in googles alternative to gpus yes and so they are cheaper to run google has been pretty quiet about what the price point is here but we have seen a lot of people start to pivot to google cloud and because the TPS such a good reputation out here in silicon

Mackenzie Sigalos (Business News Correspondent) 03:00.550

valley also on the street

? (?) 03:02.750

all right mackenzie sagalos thank you