Nvidia Challenger Groq Enlists Morgan Stanley to Raise $300 Million

Groq, an Nvidia rival that develops specialized server chips and software for artificial intelligence, has told investors it wants to raise about $300 million, according to two people who spoke to the company’s leaders. It has tapped Morgan Stanley to help with the fundraising, according to one of the people and a third person. The new round would roughly double its total funding, bringing it closer to startup rivals such as Cerebras in terms of total cash raised.

Started nearly eight years ago by Jonathan Ross, one of the inventors of Google’s specialized chip called the tensor processing unit, Groq has positioned itself as a cheaper and faster alternative to Nvidia chips, which have long been the gold standard for AI developers. Nearly 20 AI chip developers, including Groq and Cerebras, have collectively raised more than $5.5 billion, according to The Information’s AI Chip Database. But success has been elusive for the vast majority of them, underscoring the difficulty and expense of the task.