Groq Seeks $650M After Nvidia's $20B Blackwell Licensing Win
0h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
groqnvidia
Fazen Markets Editorial Desk
Collective editorial team · methodology
Trades XAUUSD 24/5 on autopilot. Verified Myfxbook performance. Free forever.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The majority of retail investor accounts lose money when trading CFDs. Vortex HFT is informational software — not investment advice. Past performance does not guarantee future results.
Groq, a developer of specialized AI processors, is pursuing a new $650 million funding round, as reported on May 28, 2026. This major capital raise effort follows the news that rival Nvidia has secured a landmark $20 billion licensing agreement for its flagship Blackwell architecture. As of 3:52 PM UTC today, Nvidia's stock trades at $213.21, down 0.77% on the session, with a daily range between $211.22 and $214.29. The report suggests intensified competition for capital and market share in the AI accelerator space.
The fundraising attempt arrives amid a period of record cash deployment in AI infrastructure. Over the past 24 months, venture capital firms and strategic investors have directed over $200 billion toward compute-related hardware companies, as tracked by PitchBook. This financing wave stems directly from the global AI compute shortage, which has created a multi-tiered market for alternatives to dominant suppliers.
The immediate catalyst for Groq's move is Nvidia's $20 billion Blackwell licensing win. That deal validates the immense value of proprietary AI chip architecture and demonstrates a key monetization path beyond direct hardware sales. It signals to investors that the ecosystem's value is expanding beyond chip manufacturing into high-margin intellectual property licensing.
Historically, large licensing deals in semiconductors have preceded intense investment cycles. In July 2018, Arm Holdings announced a series of landmark architectural licenses with key partners, which preceded a wave of over $10 billion in funding for Arm-based server CPU startups like Ampere Computing. The Nvidia agreement is of a larger magnitude and targets the more lucrative AI training and inference market.
The reported figures define the current stakes in the AI silicon race. Groq's targeted $650 million raise is substantial for a private company in this sector. For comparison, leading AI chip competitor Cerebras Systems raised around $720 million in total funding before its 2025 IPO. Nvidia's $20 billion licensing deal is unprecedented in scale for a single architecture agreement, dwarfing the typical IP licensing revenue for semiconductor firms.
| Metric | Groq | Nvidia (NVDA) |
|---|---|---|
| Current Focus | $650M Fundraise | $20B Licensing Deal |
| Market Cap | Private | ~$5.2 Trillion |
| Daily Stock Move | N/A | -0.77% |
| Key Price Level | N/A | $213.21 |
Against a broader market, Nvidia's 0.77% decline contrasts with the Nasdaq 100, which is down only 0.3% today. The stock's intraday range of $211.22 to $214.29 shows a relatively tight 1.4% swing, indicating subdued volatility despite the major deal news. This suggests the market may have anticipated or already priced in such a strategic move.
The capital flows implied by these moves will benefit several adjacent sectors. Primary beneficiaries include advanced packaging firms like Amkor Technology and semiconductor equipment suppliers such as Applied Materials and ASML, which see demand from both Nvidia's partners and new challengers. Fabless design software companies like Cadence Design Systems and Synopsys also gain from increased architectural development activity.
Potential losers include companies with competing proprietary architectures that may struggle to attract similar licensing interest. This could pressure other AI chip startups to demonstrate clearer paths to monetization beyond hardware sales. The sheer size of Nvidia's deal also raises the competitive bar for any company attempting to license AI intellectual property, potentially consolidating power among a few established players.
A key risk is execution. Groq must deploy $650 million effectively to scale its technology and commercial relationships in a market where Nvidia's ecosystem is deeply entrenched. The counter-argument is that specialized, non-GPU architectures like Groq's LPU may find profitable niches in inference workloads where cost-per-query is paramount, even without matching Nvidia's scale.
Positioning data from major prime brokers shows hedge funds have been net buyers of semiconductor capital equipment stocks over the past week, anticipating increased capital expenditure. Flow has rotated out of some pure-play AI software names and into hardware infrastructure, reflecting a bet on the physical build-out phase of the AI cycle.
Markets will watch for official confirmation of Groq's funding round and the valuation it implies, likely within the next 30-45 days. The identity of the lead investors will signal strategic intent; participation from cloud hyperscalers like Amazon, Google, or Microsoft would be particularly significant.
For Nvidia, the next catalyst is its Q1 FY2027 earnings report on June 5, 2026. Analysts will scrutinize guidance for any details on the licensing deal's revenue recognition timeline and its impact on gross margins. Key technical levels for NVDA stock include immediate support at the 50-day moving average near $208 and resistance at its recent all-time high of $219.47.
Industry attention will also focus on any additional Blackwell licensing announcements from other major tech or sovereign entities. The success or struggle of early Blackwell-based systems from licensees, expected in late 2026 or early 2027, will validate the licensing model's technical and commercial viability.
A semiconductor architecture licensing deal grants a company the right to design, manufacture, and sell chips based on another firm's proprietary blueprint or instruction set. Unlike buying finished chips, the licensee pays an upfront fee and ongoing royalties to use the intellectual property. This allows the licensee to customize the design for specific needs while the licensor, like Nvidia with Blackwell, earns high-margin revenue without bearing manufacturing costs. The $20 billion scale suggests it is likely an architectural license, not just a patent portfolio license.
Groq's Language Processing Unit is a deterministic architecture designed specifically for running large language model inference. It focuses on minimizing latency and maximizing predictability by using a synchronized, single-core design, unlike Nvidia's GPU's parallel, multi-core approach. This makes Groq's hardware potentially faster and more efficient for specific inference tasks but less flexible for the diverse training workloads where Nvidia's GPUs dominate. The architectural difference is central to Groq's value proposition as a niche specialist.
Vortex HFT is our free MT4/MT5 Expert Advisor. Verified Myfxbook performance. No subscription. No fees. Trades 24/5.
Position yourself for the macro moves discussed above
Start TradingSponsored
Open a demo account in 30 seconds. No deposit required.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.