(Bloomberg) -- Artificial intelligence startup Groq Inc. has raised $640 million in new funding, underscoring investor enthusiasm for innovation in chips for AI systems.
The startup designs semiconductors and software to optimize the performance of AI tasks, aiming to help alleviate the huge bottleneck of demand for AI computing power. It was valued at $2.8 billion in the deal, which was led by BlackRock Inc. funds and included backing from the investment arms of Cisco Systems Inc. and Samsung Electronics Co.
The Series D round almost triples the Mountain View, California-based company’s valuation from $1 billion in a funding round in 2021. Groq is entering the market for new semiconductors that run AI software, competing against incumbents such as Intel Corp., Advanced Micro Devices Inc. and leader Nvidia Corp.
Groq plans to use the funding to build about 108,000 language processing units, hire significantly and look at some acquisitions, Chief Executive Officer Jonathan Ross said in an interview on Bloomberg Television.
Former Intel executive Stuart Pann is joining Groq to serve as its chief operating officer, the company said.
Additionally, Yann LeCun, Meta’s chief AI scientist, will become an adviser to the startup. LeCun’s push for open source models — where technology is shared more freely — is important to the industry and is what allowed Groq to grow, Ross said.
“Groq actually would not exist today if not for open source,” Ross said. “We built the best chips, but if we didn’t also have the software we would not 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 models themselves, he said.
(Updates with Bloomberg Television interview starting in fourth paragraph. A previous version of the story corrected the spelling of Cisco.)
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