Groq’s $650M Hail Mary: From Chips to Clouds, Can They Outrun Nvidia’s Shadow?

by

Well, butter my biscuit and call me impressed-Groq is at it again, this time with a $650 million fundraiser that smells more like a midlife crisis than a business strategy. Fresh off the heels of their $20 billion Nvidia deal (which, let’s be honest, was less of a partnership and more of a Silicon Valley yard sale), they’re now spinning out a “Groq2” because, apparently, one Groq wasn’t enough. Who knew AI chipmakers could be so dramatic?

  • Groq begs for $650m to build “neoclouds”-because regular clouds are so last season.
  • Nvidia snags Groq’s tech for $20b, leaving them with a cloud business and a lot of feelings.
  • Groq2 pivots from chips to AI infrastructure-because who needs hardware when you can have buzzwords?

Groq Inc., in a move that screams “we’re totally fine, why do you ask?”, is raising up to $650 million from their current backers to fund this new venture. According to Axios (the gossip column of the tech world), investors like Disruptive and Infinitum are ready to foot the bill, presumably while muttering, “This better work.” The plan? To build AI “neoclouds,” which I can only assume are clouds that wear monocles and sip artisanal coffee.

– Techmeme (@Techmeme) May 28, 2026

This all comes after Nvidia’s $20 billion cash grab for Groq’s inference technology, a deal so big it made even the most jaded VCs blush. Groq, in their announcement, assured everyone they’d “continue operating separately,” which is tech-speak for “we’re still relevant, promise.”

Nvidia takes the silicon, Groq keeps the cloud (and their dignity?)

In what can only be described as a corporate divorce, Nvidia got the house (the silicon) and Groq kept the dog (the cloud business). Groq’s founder, Jonathan Ross, and his crew are jumping ship to Nvidia, leaving behind a skeleton crew to run GroqCloud. Because nothing says “we’re thriving” like your entire leadership team abandoning you for the competition.

Alex Davis, CEO of Disruptive, told CNBC that Nvidia is “acquiring all of Groq’s assets, except the cloud business,” which is now the cornerstone of Groq2’s strategy. So, they’re basically betting the farm on a cloud platform in a market already dominated by hyperscalers. What could go wrong?

Groq2 is pivoting away from chip manufacturing (because who needs tangible products when you can sell vaporware?) and into “AI neoclouds.” This puts them in direct competition with companies that actually have a clue about AI infrastructure. It’s like watching a goldfish try to outswim a shark-adorable, but doomed.

Second act: Betting on clouds with fancy names

For Nvidia, the $20 billion Groq deal is just another Tuesday. For Groq, the $650 million raise is a Hail Mary pass that might just land them in the end zone-or in bankruptcy court. Davis, ever the optimist, warned of a potential “financing crisis” for AI data centers by 2027. So, Groq2’s plan is to build a cloud platform in a market that’s already overcrowded. Sounds foolproof.

In the end, Groq’s neocloud thesis is a high-stakes gamble. Will it pay off? Only time will tell. But one thing’s for sure: Silicon Valley loves a good comeback story-or a spectacular flameout. Popcorn, anyone?

Read More

2026-05-28 22:27