Groq, an Nvidia Rival, Nears $2.2 Billion-Valuation BlackRock Deal; Musk’s Mystery Company Revealed

The startups developing specialized artificial intelligence chips face some heady challenges—most obviously that they’re taking on entrenched giant Nvidia. One challenge they don’t face, though, is a lack of funding. 

Groq, a startup that develops chips that are specially designed to run large language models, expects to finalize a fundraising of more than $300 million led by mutual fund giant BlackRock in the next two weeks, according to a person who reviewed the deal. 

The round, which could value the eight-year-old startup at $2.2 billion before the investment, would more than double its valuation. In 2021, investors led by Tiger Global Management and D1 Capital valued Groq at $1.1 billion.

The new deal comes with a catch: BlackRock has required Groq to submit to a financial audit. That isn’t typical for AI deals in the current, very competitive market to win deals—although it may be standard for BlackRock—and may speak to the challenges AI hardware startups face in taking on Nvidia.