In a social media post with a picture of him and Ross, Palihapitiya reminisced about how Ross convinced him to invest in Groq nine years ago, which led to the seed capital of $10 million for the startup. “Taken September 1, 2016, when Jonathan Ross convinced me we could take on the giants, build new silicon and that AI was coming. In typical SV (Silicon Valley) fashion, we didn’t even he a company yet — just a term sheet from me to invest and the three of us,” he wrote.
In lieu of the funding, Social Capital took a 28.57% stake in Groq and a board seat for Palihapitiya, along with cofounders Ross and Doug Whitman.Groq had Google among its early competitors, according to the investment memo for Social Capital’s first bet on the startup. Notably, Ross spearheaded the team behind the first stages of Google’s tensor processing unit (TPU), which the tech giant is now leveraging to gain in the AI race.
Palihapitiya said he spent the next month after the first funding round “recruiting as many of the TPU team from Google Wisconsin as I could.”
“The company, as with all important companies, went through its own trials and tribulations including promoting Jonathan from CTO to CEO and the inevitable falling out and repair of his and my relationship. Anyways, it all happened for a reason. Today we close this almost decade chapter and Jonathan starts a new one with Nvidia,” the Social Capital CEO wrote.
Nvidia-Groq deal
Nvidia has agreed to acquire assets from Groq for $20 billion in cash in its largest transaction ever. The deal will bring Groq's specialised inference chip technology and top engineering talent under Nvidia's wing. The startup will continue to operate independently.
Under the arrangement, Groq founder and CEO Jonathan Ross will join Nvidia along with president Sunny Madra and other key staff. Simon Edwards, Groq's finance chief, will take the helm of the company as it maintains its cloud business, GroqCloud, independently.The deal will happen at a nearly threefold premium over Groq's $6.9 billion valuation in September, when the startup had raised $750 million in a round led by investment firm Disruptive.