Groq, a start-up chip developer that is developing chips specifically for the generative AI hardware industry, are aiming to challenge existing chip producers such as Nvidia, with a new generation of chips and processors that will be faster than current conventional processors.
The company announced a successful $640 million funding raise on Monday bringing Groq’s total raised funding to over $1 billion.
The company claims its language processing units (LPU’s) can run existing generative AI models similar in architecture to OpenAI’s ChatGPT and GPT-4o at 10x the speed and on-tenth the energy consumed by current models.
Groq provides an LPU-powered developer platform called GroqCloud that offers “open” models like Meta’s Llama 3.1, and Mistral’s Mixtral, as well as an API that allows customers to use its processor cloud structures. In July they reportedly had over 356,000 developers, working on their platform and said that a portion of the proceeds from the funding raised will be used to scale capacity and add new models and features.
The Ai Chip market is bound to get more competitive with current market leader Nvidia holding upwards of 70% of the market but are also facing headwinds currently with the delay of their new twin-chip announced this week. Nvidia has seen their share price drop by -25% in the past few months with July being the worst month of decline the share price has seen since September 2022.
According to some industry analysts, the Ai Chip and processor market could reach $400 Billion in size within five years and there is also no shortage in competitors for this growing market.
Nvidia has been reported to be starting a new business unit focused on designing bespoke chips for cloud computing firms and others, including AI hardware, and there will be further challenges from the likes of Google’s Axion Chip, Microsoft’s Colbalt 100 CPU and Amazon’s Tranium and Graviton processors and there are bound to be more new chip manufacturers emerging soon to take advantage of the expected explosion in Ai driven Tech developments and the related computing power it will require.
In August 2023, Groq formally announced that it was to partner with Samsung’s to manufacture 4nm LPUs, which are expected to deliver higher performance and efficiency than their 1st– Gen 13nm chips. The company says they have production plans to deploy over 108,000 LPUs by the end of their first quarter in 2025, and the new funding raised, should go a long way in making that a reality.