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What’s Inside Groq’s Billion-Dollar Deal with Saudi Arabia? Hint: Global AI Domination

Updated: July 10, 2025 09:53

Silicon Valley AI processor company Groq is in advanced negotiations to raise $300 million to $500 million, targeting a postmoney valuation of $6 billion. The round is being driven by Groq's recent agreement with Saudi Arabia to supply highperformance AI inference chips worth $1.5 billion.
 
Main points of the progress:
  • Groq chips are designed for very rapid execution of pretrained AI models as a substitute for Nvidia's monopoly of the inference market
  • The Saudi agreement should bring $500 million in annual revenue, a huge spike from Groq's $90 million in 2024 revenue
  • Groq chips support opensource models like Meta's Llama 4 and Google's Gemma, thus becoming a top player in scalable AI infrastructure
  • The company will increase its cloud offerings and open a data center in Finland to cater to global demand
  • Groq has previously raised $640 million in a Series D round led by Cisco Investments, Samsung Catalyst Fund, and BlackRock Private Equity Partners
  • The startup's valuation has grown from $2.8 billion in 2024 to an estimated $6 billion, indicating investors' confidence in its business momentum and tech edge
As the need for AI hardware continues to get hotter, Groq's positioning and Saudibacked growth may recast inference chip competitive forces.
 
Sources: The Information, Reuters, Economic Times, Investing.com, EconoTimes, Tech in Asia, The Star Malaysia

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