AI chip startup Groq targets $6 billion valuation in new funding round amid Saudi deal
U.S.-based semiconductor startup Groq is in talks with investors to raise between $300 million and $500 million, aiming for a post-investment valuation of $6 billion, according to a report by The Information on Wednesday citing sources familiar with the matter.
The funding is intended to support Groq’s recently announced agreement with Saudi Arabia, which includes a $1.5 billion commitment secured in February to expand the delivery of Groq’s advanced AI chips to the kingdom.
Groq has indicated to investors that these contracts with Saudi Arabia could generate approximately $500 million in revenue in 2025, underscoring the significance of the deal in its growth trajectory.
The Silicon Valley-based company, known for manufacturing AI inference chips designed to optimize speed and efficiently execute commands from pre-trained models, has not yet responded to requests for comment.
In its previous financing round last August, Groq raised $640 million in a Series D round led by Cisco Investments, Samsung Catalyst Fund, and BlackRock Private Equity Partners, which valued the company at $2.8 billion.