American AI chip maker Groq reports that it has received a $1.5 billion commitment from Saudi Arabia. With this, the Middle Eastern country wants to expand the supply of advanced AI chips.
The Silicon Valley company, founded by ex-Google employee and creator of the TPU Jonathan Ross, is known for producing inference chips that optimize speed and execute commands from pre-trained models.
Formidable competitor
Analysts see Groq as a potential competitor to Nvidia. The latter is currently the big winner in the AI revolution. With Groq and its self-developed Language Processing Unit (LPU), a formidable competitor has been in the making for some time. News of the $1.5 billion investment reinforces that picture.
The LPU was slated to launch in early 2024. While other potential Nvidia rivals focus on both training and inference, Groq’s goals are crystal clear: Groq is Fast AI Inference. Through OpenAI-compatible API links, the company aims to lure users away from using closed models such as GPT-4o and o1.
The startup already has an existing agreement with Aramco Digital, the technology subsidiary of oil giant Aramco. In December, the companies jointly built a major AI hub in the region.
Data center in Damman
Groq told Reuters news agency that it will receive funds over the course of this year to expand its own existing data center in Dammam, Saudi Arabia. The company’s chips, which specialize in fast-response LLM applications, do fall under U.S. export controls. However, Groq revealed that it has obtained the necessary licenses to ship the chips to Dammam.
The commitment was announced during the LEAP 2025 global technology event in Saudi Arabia. During the event, the country raised a total of $14.9 billion in new AI investments.
Arabic LLM
One of the technologies that will support the data center in Dammam is Allam, an LLM developed by the Saudi government that operates in both Arabic and English.
In August, Groq reached a valuation of $2.8 billion after raising $640 million in a financing round led by Cisco Investments, Samsung Catalyst Fund and BlackRock Private Equity Partners.
Also read: Why Nvidia’s rivals think they have a chance to topple it