On Christmas Eve 2025, Nvidia paid $20 billion for Groq's assets—nearly triple the AI chip startup's $6.9 billion valuation from three months earlier. The deal brings Groq's founder Jonathan Ross, who created Google's original Tensor Processing Unit, and his breakthrough inference technology into Nvidia's fold. It's Nvidia's largest acquisition ever, nearly three times bigger than its $7 billion Mellanox purchase. By structuring the deal as a "non-exclusive licensing agreement" rather than an outright acquisition, Nvidia bypasses Hart-Scott-Rodino Act merger review requirements that trigger automatic FTC scrutiny—following Microsoft's 2024 playbook with Inflection AI. The deal's unusual structure has drawn immediate analyst warnings about "the fiction of competition" as Groq's leadership and technical talent move to Nvidia while the company nominally continues independently. Adding to the intrigue: 1789 Capital, where Donald Trump Jr. serves as partner, was among Groq's September investors who saw their stake nearly triple in just three months.
The stakes are enormous. Inference—running trained AI models to answer user queries—now accounts for 80-90% of AI's lifetime costs and will be a $250 billion market by 2030, up from $106 billion in 2025. Groq's chips claimed 10x speed and 90% lower energy use versus GPUs for inference workloads. By absorbing Groq rather than competing, Nvidia eliminates a credible threat as hyperscalers like Google, Amazon, and Microsoft build their own chips to escape Nvidia's 90% market stranglehold. Nvidia stock rose to $190.53 on December 26, up 1.02% and extending an 11% six-day rally, as analysts called the deal "strategic" for maintaining dominance. Bernstein's Stacy Rasgon noted Nvidia CEO Jensen Huang's relationship with the Trump administration "appears among the strongest of the key US tech companies"—a potentially crucial factor as the deal faces antitrust scrutiny. Wedbush analyst Dan Ives projects Nvidia will hit $250 by end of 2026, while the company prepares to ship H200 chips to China before Lunar New Year following Trump's export policy reversal.
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People Involved
Jonathan Ross
Groq Founder & CEO (Joining Nvidia as part of $20B deal)
Jensen Huang
Nvidia CEO (Leading AI infrastructure consolidation strategy)
Sunny Madra
Groq President (Joining Nvidia with Jonathan Ross)
Simon Edwards
Groq CFO, incoming CEO (Taking over as CEO of independent Groq entity)
Dan Ives
Wedbush Securities Managing Director, Equity Research (Bullish on Nvidia post-Groq deal)
Donald Trump Jr.
Partner at 1789 Capital (Investor in Groq via 1789 Capital; stands to profit from Nvidia deal)
Organizations Involved
NV
Nvidia Corporation
Semiconductor Company
Status: Acquiring Groq's assets and team for $20B
Controls 90%+ of the AI chip market through GPU dominance and the CUDA software moat.
GR
Groq Inc.
AI Chip Startup
Status: Assets and team sold to Nvidia for $20B; continuing as independent entity
Built Language Processing Units claiming 10x GPU speed for AI inference using deterministic architecture and on-chip SRAM.
FE
Federal Trade Commission (FTC)
Federal Agency
Status: Scrutinizing tech consolidation; cleared Nvidia-Intel deal December 19
U.S. antitrust enforcer investigating Big Tech acquisitions and AI market concentration.
17
1789 Capital
Venture Capital Firm
Status: Groq investor; stands to profit from Nvidia deal
Conservative-leaning venture capital firm focused on AI, computing, and technology companies. Partner Donald Trump Jr. joined in November 2024.
WE
Wedbush Securities
Investment Firm
Status: Bullish on Nvidia post-Groq acquisition
Los Angeles-based investment firm with prominent tech equity research division led by Dan Ives.
Timeline
Wedbush Sets $250 Price Target for 2026
Market
Analyst Dan Ives projects Nvidia stock will reach $250 by end of 2026, citing Groq deal strengthening AI inference moat.
Nvidia Plans China H200 Shipments Before Lunar New Year
Market
Following Trump administration approval, Nvidia informs Chinese customers it will ship H200 GPUs before mid-February 2026, adding production capacity for Q2 2026.
Wall Street Analysts Endorse Groq Deal
Market
Bank of America reiterates Buy rating, calling deal strategic like Mellanox; Bernstein says $20B is "pocket change" for Nvidia's $4.6T market cap.
Chamath Palihapitiya Praises Jonathan Ross
Market
Early Groq investor and Social Capital CEO calls Ross a "technical genius of biblical proportions" who will do "incredible things at Nvidia."
Nvidia Stock Rises Above $190 on Deal News
Market
Nvidia shares climbed over $190 in after-hours trading following Groq deal announcement, signaling investor confidence in strategic value despite antitrust concerns.
Analysts Highlight Antitrust Bypass Strategy
Market
Industry analysts identify deal structure as designed to avoid Hart-Scott-Rodino Act merger review requirements, with Bernstein warning of "fiction of competition" as talent transfers to Nvidia.
Nvidia Stock Rises 1% on Groq Deal, Extends Rally
Market
Nvidia closed at $190.53, up 1.02%, extending 11% six-day winning streak as analysts praised deal as strategic move to maintain AI dominance.
Analysts Highlight Trump Administration Ties
Market
Bernstein notes Nvidia CEO Jensen Huang has "among the strongest" relationships with Trump administration of key US tech CEOs, potentially influencing regulatory treatment.
Nvidia Announces $20B Groq Deal
Deal
Nvidia's largest acquisition ever; licenses IP, hires Ross and team; Groq continues independently.
FTC Clears Nvidia-Intel $5B Investment
Regulatory
Regulators approve deal despite Nvidia's 85-95% data center GPU market share.
Groq Raises $750M at $6.9B Valuation
Funding
Led by Disruptive with BlackRock, Neuberger Berman; valuation jumps from $2.8B.
China Accuses Nvidia of Antitrust Violations
Regulatory
Chinese regulators claim Nvidia violated Mellanox acquisition terms, vow further investigation.
Simon Edwards Joins Groq as CFO
Leadership
Former ServiceMax and GE Digital CFO takes finance role three months before Nvidia deal.
Saudi Arabia Commits $1.5B to Groq
Funding
Major commitment to expand Groq's advanced AI chip delivery.
Donald Trump Jr. Joins 1789 Capital as Partner
Leadership
After Trump wins 2024 presidential election, his son joins 1789 Capital as partner rather than government role—the firm had invested in Groq.
Groq Raises $640M at $2.8B Valuation
Funding
Startup more than doubles previous valuation as inference market gains momentum.
FTC Investigates Microsoft-Inflection Deal
Regulatory
Federal regulators probe whether Microsoft's "licensing" structure was disguised acquisition to bypass antitrust review.
Microsoft Acqui-Hires Inflection AI for $650M
Deal
Microsoft hires Inflection's founders and staff, licensing IP for $650M in deal structured to avoid merger review—setting precedent for Nvidia-Groq.
Nvidia-Arm Deal Collapses
Deal
Parties terminate after regulatory opposition; SoftBank keeps $1.25B deposit.
FTC Sues to Block Nvidia-Arm Deal
Regulatory
Federal regulators cite competition concerns in auto chips, cloud, networking.
Nvidia Announces $40B Arm Acquisition
Deal
Nvidia seeks to buy Arm from SoftBank in semiconductor industry's largest deal.
Nvidia Completes Mellanox Acquisition
Deal
Deal closes for $7B after regulatory approval from EU, U.S., China.
Nvidia Announces $6.9B Mellanox Acquisition
Deal
Nvidia's largest deal to date, entering high-performance networking market.
Groq Founded by Ex-Google Engineers
Company
Ross leaves Google to start Groq, betting on AI inference over training.
First TPU Deployed in Google Data Centers
Innovation
Ross's team ships TPU across Google infrastructure in 15 months, enabling AI at scale.
Jonathan Ross Starts Google TPU Project
Innovation
Ross begins Tensor Processing Unit as 20% project at Google, designing first-gen TPU chip.
The FTC or DOJ challenges the deal as a disguised acquisition meant to eliminate a credible competitor in the exploding inference market. Despite the "licensing" structure, regulators argue hiring the entire leadership team and obtaining exclusive technology access constitutes anti-competitive consolidation. The case drags through 2026. If blocked, Groq remains independent with $1.75 billion in funding and renewed credibility as the company that scared Nvidia into a $20 billion offer. The precedent chills future Big Tech talent-and-IP deals.
2
Deal Closes, Groq Technology Disappears Into Nvidia
Discussed by: Industry analysts and semiconductor reporters tracking consolidation patterns
Regulators approve the deal by March 2026, accepting Nvidia's framing as a licensing agreement rather than acquisition. Ross and his team integrate Groq's LPU architecture into Nvidia's roadmap, potentially creating a new product line for inference workloads. The independent Groq entity, led by CFO Simon Edwards with no technology or engineering team, quietly winds down or pivots to unrelated business. The market loses its most credible GPU alternative for inference. Nvidia's moat deepens as hyperscalers have fewer options for custom chip partnerships.
3
Groq Tech Revitalizes Nvidia, New Challengers Emerge
Discussed by: AI infrastructure analysts and venture capitalists backing semiconductor startups
The deal closes and Groq's inference technology gives Nvidia a genuine performance leap in the $250 billion inference market, validating the premium paid. But the acquisition creates a vacuum. New startups founded by ex-Groq engineers or funded by hyperscalers emerge to challenge Nvidia's dominance. Google doubles down on TPUs, Amazon on Trainium, Microsoft on custom silicon. The Groq deal is remembered as Nvidia's peak—the moment it acknowledged GPUs alone couldn't hold the inference market, signaling weakness competitors exploited.
4
Congress Acts, Retroactive Breakup Ordered
Discussed by: Progressive antitrust advocates and tech policy researchers
The Groq deal becomes a political flashpoint. Congress, already investigating Big Tech concentration, passes legislation empowering regulators to retroactively unwind acquisitions that harm competition—similar to the FTC's failed Meta challenge. Nvidia is forced to spin out Groq's technology and rehire the team as an independent entity by 2028. The precedent reshapes M&A strategy across tech: companies fear deals will be unwound years later. Venture funding for AI chip startups surges as investors bet on a more competitive landscape.
Discussed by: Antitrust scholars citing Microsoft-Inflection precedent and German Federal Cartel Office rulings
Following its 2024 investigation of Microsoft's $650M Inflection AI "acqui-hire," the FTC concludes that licensing agreements combined with wholesale talent transfers constitute acquisitions requiring merger review. The agency sues to block the Groq deal, arguing the non-exclusive licensing structure is a fig leaf. German and EU regulators join, having already ruled Microsoft-Inflection was a "concentration" under merger law. If successful, the case establishes that Big Tech can't use IP licensing plus hiring to circumvent antitrust review, forcing future deals through traditional merger approval processes.
Discussed by: Political analysts, tech policy observers, Bernstein equity research
The Trump administration's FTC declines to challenge the Groq deal despite its size and market concentration, signaling a hands-off approach to Big Tech M&A. Jensen Huang's strong White House ties—and 1789 Capital's Groq stake—help smooth approval. The precedent emboldens further consolidation: Nvidia acquires additional AI startups through similar licensing structures, while rivals like Google and Meta use the playbook to absorb competitors. By 2027, the AI chip market is divided among three giants rather than a dozen contenders. Critics warn the administration prioritized political relationships over competition enforcement.
Historical Context
Google's DoubleClick Acquisition (2007)
2007-2008
What Happened
Google bought DoubleClick, a digital ad server, for $3.1 billion. The FTC approved the deal despite concerns it would consolidate Google's dominance across search ads, display ads, and ad-serving infrastructure. Microsoft and competitors warned the merger would create an unbreakable ad monopoly.
Outcome
Short Term
Google integrated DoubleClick, creating the three-sided platform that dominates digital advertising today.
Long Term
The deal is now cited as a regulatory failure. Google controls demand-side platforms, ad exchanges, and servers—extracting fees at every layer. Antitrust lawsuits in 2023-2025 target this structure.
Why It's Relevant Today
Like DoubleClick, Groq gives Nvidia vertical integration in AI infrastructure. If regulators approve, will they regret it a decade later?
Facebook's Instagram and WhatsApp Acquisitions (2012, 2014)
2012-2014
What Happened
Facebook bought Instagram for $1 billion in 2012 and WhatsApp for $19 billion in 2014. Both were cleared by the FTC at the time. Internal emails later revealed CEO Mark Zuckerberg's strategy: "It is better to buy than to compete." The FTC sued in 2020 to retroactively unwind the deals as illegal "killer acquisitions" meant to eliminate rivals.
Outcome
Short Term
Facebook integrated both apps, maintaining dominance in social networking and messaging as mobile usage exploded.
Long Term
A federal court dismissed the FTC's challenge in 2025, ruling that regulators can't unwind approved deals years later without new evidence.
Why It's Relevant Today
Nvidia paying 3x premium for Groq mirrors Facebook's pre-emptive elimination of threats. Can regulators prove anti-competitive intent this time?
Nvidia's Failed Arm Acquisition (2020-2022)
2020-2022
What Happened
Nvidia sought to buy Arm, the British chip designer whose architecture powers nearly all smartphones, from SoftBank for $40 billion. The FTC sued to block the deal in December 2021, arguing it would harm competition in auto chips, cloud processors, and networking by giving Nvidia control over IP used by rivals. The EU and UK also opposed.
Outcome
Short Term
The deal collapsed in February 2022. SoftBank kept Nvidia's $1.25 billion deposit and later took Arm public.
Long Term
The failure showed regulators will block deals that consolidate critical infrastructure, even in fast-moving tech markets.
Why It's Relevant Today
Nvidia learned from Arm's failure. Structuring Groq as a "licensing agreement" may dodge the acquisition label that killed the Arm deal.
