(Bloomberg) — Artificial intelligence startup Groq Inc. has raised $640 million in new funding, underscoring investor enthusiasm for innovation in chips for AI systems.
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The startup designs semiconductors and software to optimize the performance of AI tasks, aiming to help alleviate the huge bottleneck in demand for AI computing power. It was valued at $2.8 billion in the deal, which was led by funds from BlackRock Inc. and included support from the investment arms of Cisco Systems Inc.
The Series D round nearly triples the Mountain View, California-based company’s valuation of $1 billion in a 2021 funding round. Groq is entering the market for new semiconductors that run AI software, competing with established companies such as Intel Corp., Advanced Micro Devices Inc. and leader Nvidia Corp.
Groq plans to use the financing to build about 108,000 language processing units, hire significantly and look at some acquisitions, CEO Jonathan Ross said in an interview with Bloomberg Television.
Former Intel executive Stuart Pann is joining Groq to serve as chief operating officer, the company said.
Additionally, Yann LeCun, Meta’s chief AI scientist, will become an advisor to the startup. LeCun’s push for open source models — where technology is shared more freely — is important to the industry and is what has enabled Groq’s growth, Ross said.
“In fact, Groq wouldn’t exist today if it weren’t for open source,” Ross said. “We build the best chips, but if we didn’t also have the software we wouldn’t be able to demonstrate that.”
Meta’s Llama models, which are open source, allow people to get into the AI business without having to train the models themselves, he said.
(Updates with Bloomberg Television interview beginning in fourth paragraph. An earlier version of the story corrected the spelling of Cisco.)
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