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Chip Startup Groq Backs Saudi AI Ambitions With Aramco Deal

By Matthew Martin
A company logo sits on the side of a crude oil storage tank at the Juaymah tank farm at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Ras Tanura, Saudi Arabia, on Monday, Oct. 1, 2018. Saudi Aramco aims to become a global refiner and chemical maker, seeking to profit from parts of the oil industry where demand is growing the fastest while also underpinning the kingdom’s economic diversification. Photographer: Simon Dawson/Bloomberg

(Bloomberg) -- Artificial intelligence startup Groq Inc. has partnered with oil producer Aramco to build a giant data center in Saudi Arabia that it hopes will become a hub for companies running AI systems across the Middle East, Africa and India.

The California-based startup will operate what it has said will be the world’s largest AI inferencing center that initially has 19,000 language processing units, while Aramco will fund the development that is expected to cost “in the order of nine figures,” Groq Chief Executive Officer Jonathan Ross said in an interview in Riyadh. The data center will be up and running by the end of this year, and could later expand to include a total of 200,000 language processing units, Ross said

Groq has partnered with Aramco Digital, a new unit of the world’s largest oil producer intended to help Aramco harness AI to help its core energy business while also facilitating other firms to use AI. 

Aramco is “planning to do massive capital deployments for this, and it is a way to help diversify the economy away from oil,” Ross said. By building the data center in Saudi Arabia, Groq aims to capitalize on the country’s low energy costs, availability of land, and access to 4 billion people within a 100 millisecond ping - a measure of how quickly data can travel between processing location and users.

Saudi Arabia wants to become a hub for technology industries like AI as it seeks ways to modernize its economy and boost other sources of income besides oil. Yet some of its growth plans have been hampered by US government restrictions on exports of the latest AI chips, which has limited the availability of the latest chips developed by Nvidia Corp.

Groq said it does not expect to face any US government restrictions on its plans to boost its presence in Saudi Arabia, including establishing a regional headquarters in Riyadh.

“We’ve been very open with Commerce about our intent to deploy here,” Ross said. “We voluntarily decided not to sell to any Chinese companies or entities even before this crackdown.”

Groq could look at working with the Saudi oil producer on other projects in the future, Ross said. “The expectation is that we’re going to partner with Aramco Digitial for quite a bit of our deployment in this region and anywhere we can,” he said. “They’ve been a great partner so we would work with them anywhere we could.”

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