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Groq, an AI Chip Firm, raises $640 Million to take on Nvidia

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A fresh investment round led by Blackrock has secured $640 million for Groq, a business that is creating chips to run generative AI models faster than traditional processors. The company announced this information on Monday. Participating companies included Samsung Catalyst Fund, Cisco, KDDI, Neuberger Berman, and Type One Ventures.

Groq, which was allegedly hoping to raise $300 million at a somewhat lower ($2.5 billion) valuation, is celebrating a significant victory with this tranche, which puts the company’s total raised to over $1 billion and values it at $2.8 billion. Groq raised approximately $1 billion in April 2021 and $300 million in a funding round headed by D1 Capital Partners and Tiger Global Management. This valuation more than doubles that amount.

Groq also announced today that Stuart Pann, the former head of Intel’s foundry business and former CIO at HP, will join the startup as chief operational officer. Yann LeCun, the main AI scientist at Meta, will advise the company technically. Given Meta’s investments in its own AI chips, LeCun’s appointment is a little surprising, but it definitely provides Groq a strong ally in a competitive market.

Groq is developing an LPU (language processing unit) inference engine after coming out of stealth in 2016. The business asserts that their LPUs can operate generative AI models that are currently in use at 10 times the speed and 1/10th the energy of OpenAI’s ChatGPT and GPT-4o.

Jonathan Ross, the CEO of Groq, is renowned for his contribution to the creation of the tensor processing unit (TPU), Google’s proprietary AI accelerator processor used for model training and execution. Nearly ten years ago, Ross co-founded Groq with Douglas Wightman, an entrepreneur and former engineer at Google parent firm Alphabet’s X moonshot lab.

Groq offers an LPU-powered developer platform called GroqCloud, which includes an API that lets users use its chips in cloud instances, as well as “open” models like Google’s Gemma, OpenAI’s Whisper, Mistral’s Mixtral, and Meta’s Llama 3.1 series. (Groq also runs GroqChat, an AI-powered chatbot playground that it introduced at the end of last year.) More than 356,000 developers were using GroqCloud as of July. According to Groq, some of the money raised during this round will be utilized to expand the company’s capacity and introduce new models and features.

“Many of these developers are at large enterprises,” stated Stuart Pann, COO of Groq. “By our estimates, over 75% of the Fortune 100 are represented.”

As generative AI becomes more popular, Groq will have to contend with competition from rival AI chip startups as well as Nvidia, the industry leader in AI hardware.

Nvidia is attempting to preserve its dominance in the market for AI processors, which are needed to train and implement generative AI models. The company is expected to dominate between 70% and 95% of this industry.

As opposed to every other year, like in the past, Nvidia has pledged to release a new AI chip architecture annually. Additionally, it is apparently starting a new business unit dedicated to creating custom chips for cloud computing companies as well as other businesses, including AI devices.

Groq faces competition from Nvidia as well as Amazon, Google, and Microsoft, who now provide or plan to provide customized chips for artificial intelligence workloads on the cloud. Customers of Google Cloud can use the aforementioned TPUs as well as Google’s Axion chip in due course. Microsoft recently introduced Azure instances in preview for its Cobalt 100 CPU, with Maia 100 AI Accelerator instances to follow in the coming months. Amazon offers its Trainium, Inferentia, and Graviton processors through AWS.

Analysts predict that in the next five years, the AI chip market might exceed $400 billion in sales, and Groq may see competition from Arm, Intel, AMD, and an increasing number of startups. Due in large part to cloud vendors’ increasing capital expenditures to meet the capacity demand for generative AI, Arm and AMD in particular have seen their AI chip businesses flourish.

Late last year, D-Matrix secured $110 million to launch a platform for inference computation that it described as unique in the market. With $120 million, Etched came out of stealth in June to unveil a processor designed specifically to accelerate the transformer, the most popular generative AI model architecture available today. Masayoshi Son of SoftBank is purportedly trying to fund $100 billion for a chip business in order to take on Nvidia. Additionally, it’s said that OpenAI is in discussions to start a chip-making venture with investment firms.

Groq is significantly spending on industry and government outreach in an effort to carve out its niche.

To create Groq Systems, a new business unit, Groq bought Definitive Intelligence, a Palo Alto-based company that provides a variety of business-oriented AI solutions, in March. Serving entities, such as sovereign nations and U.S. government agencies, that want to construct new data centers employing Groq processors or integrate Groq chips into already-existing ones falls within stems’ jurisdiction.

More recently, the startup Groq signed an agreement to install tens of thousands of its LPUs in the Norway data center of the European company Earth Wind & Power. Additionally, Groq teamed with Carahsoft, a government IT contractor, to market its solutions to public sector clients through Carahsoft’s reseller partners.

Additionally, Groq and Aramco Digital, a Saudi Arabian consulting business, are working together to install LPUs in upcoming Middle Eastern data centers.

Groq, a company located in Mountain View, California, is developing new ties with customers while simultaneously moving forward with the development of its microprocessor. The company said in August of last year that it will be working with Samsung’s foundry division to produce 4nm LPUs, which are anticipated to outperform Groq’s initial 13nm chips in terms of efficiency and performance.

By the end of Q1 2025, Groq intends to deploy over 108,000 LPUs.

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ProRata, an AI startup, Teams up with UK Publishers after reportedly Hitting $130 Million in Valuation

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A number of well-known British media outlets have joined ProRata, an AI firm that claims to compensate publishers for the usage of their work, in its expanding network of partnerships.

The Los Angeles-based firm announced on Wednesday that it has signed licensing deals with publishers such as Sky News, the Guardian, and the Daily Mail’s publisher, DMG Media.

In a recent Series A funding round, ProRata raised $25 million from investors such as the Mayfield Fund, Prime Movers Lab, and Revolution Ventures.

“ProRata’s founder and CEO Bill Gross said his firm’s AI technology is the only one that pledges to credit and compensate creators, while providing users with accurate search results.

“We have had hundreds of content owners and media companies reach out to us from around the world who are interested in piloting our technology. Stealing and scraping content is not a sustainable path forward,” he continued.

Similar alliances have previously been formed by ProRata with the German publisher Axel Springer, the Atlantic, Fortune, Time, and Universal Music Group (UMG).

Media firms are offered reasonable compensation by ProRata for the use of their content. The startup’s in-house technology may determine the proper amount of pay by evaluating the worth of the information used to create responses from an AI platform. This would make it possible to pay copyright holders for their work on a per-use basis.

Gross had previously said that AI platforms have been using “shoplifted, plagiarized content,” which fosters an atmosphere in which “disinformation thrives and creators get nothing.”

Gross is recognized for having created the pay-per-click model of internet search monetization with his business, GoTo.com, which was eventually acquired by Yahoo! in 2003.

In a recent blog post, Tige Savage, a cofounder of Revolution, stated that Bill Gross is a serial entrepreneur with extensive experience in monetization techniques.

“He’s attracted a world-class tech team led by AI luminary Tarek Najm to implement the vision and an accomplished business team, including Annelies Jansen and Jonas Lee to drive content and AI partnerships,” Savage continued.

The unpaid use of copyrighted materials by OpenAI and other tech companies to train their AI systems has led to litigation from media companies and other content creators.

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Film Bazaar Unveils an Interactive Cinema App from an Indian Tech Startup

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Arjun Nittoor, the founder of the Indian technology firm Vireza, disclosed at Film Bazaar that the company is creating a new mobile application that would transform the experience of watching movies in theaters by enabling viewers to engage with the films in real time.

The technology, which was created wholly in-house at the company’s research and development department in Bengaluru, allows viewers to use their smartphones to vote on important plot points during the movie. To keep up with the current screening, patrons download an app before entering the theater and scan a QR code at their seat.

“The film industry is one of the few sectors where the audience experience has seen minimal technological disruption in theatres,” Nittoor stated. “While screen and sound quality have advanced and 3D has been partially adopted, the viewing experience has largely remained the same for decades.”

The screen automatically brightens to show voting options and dims again when choices are made. The system uses discreet phone notifications to encourage audience participation around every ten minutes.

In 2026, Vireza intends to introduce the technology with a full-length interactive movie that will be produced in both English and South Indian for international distribution. The business is presently in the development stage and will shortly start doing multiplex chain trial screenings.

CtrlMovie’s prior success in the interactive film industry was mentioned by Nittoor. CtrlMovie is well-known for “Traces of Responsibility” and “Late Shift.”

In order to overcome the difficulties in cinematography, editing, shot composition, and writing that plagued previous attempts at the format, the firm has spent five years creating what Nittoor refers to as “a new science of filmmaking” that is especially tailored for interactive cinema.

“Despite the proliferation of viewing devices, big-ticket films continue to draw massive crowds to theatres, with box office numbers higher than ever,”  Nittoor stated. “This demand underscores the potential for a meaningful technology shift that could draw audiences out of their homes and into cinemas.”

Other Asian businesses are likewise investigating audience-driven narrative in motion pictures. In February of the following year, Japan’s King Records intends to release “Hypnosis Mic – Division Rap Battle,” an animated interactive film.

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Perplexity, an AI business, adds retail capabilities as search competition gets more intense

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Perplexity, an artificial intelligence search firm, opened a shopping hub on Monday to draw people to its platform in an effort to challenge Alphabet-owned Google’s hegemony in the search engine market.

Supported by Amazon (AMZN.O) founder Jeff Bezos and top AI chipmaker Nvidia (NVDA.O), the company launches a new tab and will provide users with product cards that display pertinent goods in answer to shopping-related queries.

According to the company, each card offers product facts in an eye-catching manner.

Shopify (SHOP.TO), one of the platform integrations that powers the new functionality, provides access to up-to-date and pertinent information on products from companies on the Canadian e-commerce platform worldwide that ship to the United States.

The goal of e-commerce platforms has been to attract more merchants by utilizing more AI-powered solutions.

‘Snap to Shop’ is a visual search engine featured in Perplexity’s online shopping rollout that displays products based on users’ pictures of an item.

The features will initially be introduced in the US before moving on to other regions; however, no timeframe has been given.

Additionally, Perplexity is launching a “Merchant Program” to enable shops to communicate with the company about its products.

Earlier in November, Reuters reported that the business was raising $3 billion in new funding.

Since the generative AI pioneer added a number of new search features to ChatGPT, OpenAI has become a direct rival of Perplexity, which has been seeking to broaden its product line.

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