Shareholders of AI chip startup Groq are set to reap huge rewards from a $20 billion deal with Nvidia, although the agreement does not involve a share transfer. This unusual arrangement sparked widespread discussion on social media, with many questioning its impact on Groq employees, including those who are about to join Nvidia and those who remain at the original company.
On Wednesday, the two companies officially announced this "non-exclusive inference technology licensing agreement", which media reports accurately valued at approximately US$20 billion. Groq CEO Jonathan Ross and President Sunny Madra will switch to Nvidia, while Groq will continue to operate as an independent company, with former CFO Simon Edwards as the new CEO.
Most Groq shareholders will receive a per-share distribution based on a $20 billion valuation, with about 85% paid immediately, 10% paid in mid-2026 and the remainder settled at the end of the year, sources said. About 90% of Groq employees will join Nvidia, and their vested shares will be fully cashed out. Unvested shares will be paid in installments in the form of Nvidia stock based on a valuation of US$20 billion. In addition, all stock plans of about 50 employees will be accelerated into cash.
Employees who stay at Groq will also receive cash payments for vested shares and enjoy the economic rights to the company's continued operations. All employees - regardless of whether they stay at Groq - will have their vesting cliff period canceled if they have been employed for less than one year to provide immediate liquidity. Groq has raised approximately US$3.3 billion since its establishment in 2016, including a US$750 million round of financing this fall, which was valued at nearly US$7 billion at that time. Investors include Social Capital, BlackRock, Neuberger Berman, Deutsche Telekom Capital Partners, Samsung, etc., and has never conducted a secondary offer transaction by employees or investors.
All in all, the deal ensures huge gains for all parties.
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