Chamath Palihapitiya is headed for a multibillion-dollar windfall following a massive deal between NVIDIA and rival semiconductor firm Groq. The Canadian-American venture capitalist owns a substantial stake in the AI chip startup through Social Capital — having made early investments totaling $62.3 million. The self-made businessman currently has a net worth of approximately $1.2 billion.
The deal will see NVIDIA license chip technology from Groq under a ‘non-exclusive agreement’. The startup specialises in inference — wherein artificial intelligence models that have already been trained respond to requests from users. While Nvidia dominates the market for training AI models, it faces much more competition in this area. Both traditional rivals such as Advanced Micro Devices and startups such as Groq and Cerebras Systems have challenged its position in this domain.
’$100bn by 2045′
Palihapitiya highlighted his early journey with Groq on Thursday — sharing the first investment memo he had written about the company. The lengthy note included his prediction that the startup could reach a valuation of $100 billion by the year 2045. He also posted a photo taken with is the founder and former CEO Jonathan Ross at the beginning of September 2016.
“He convinced me we could take on the giants, build new silicon and that AI was coming. In typical SV fashion, we didn’t even have a company yet – just a term sheet from me to invest and the three of us. I spent the next month recruiting as many of the TPU team from Google Wisconsin as I could. ‘Welcome to chips,’ I thought…Sometimes it’s simply better to be lucky than good and be fortunate enough to work with great people and follow them into battle. That is me here,” he wrote on X.
What is the NVIDIA-Groq deal?
The tech giant struck a deal to license chip technology from startup Groq earlier this week and hire away its CEO. A blog post from the company insisted that Groq would continue to function as an independent company with Simon Edwards as CEO. The startup also indicated its cloud business would remain operational and reiterated that the deal was for a “non-exclusive” license to Groq technology.
A CNBC report claimed that Nvidia had agreed to acquire Groq for $20 billion in cash. Neither company has so far disclosed financial details of the agreement.
