Nvidia avoids acquisition label with Groq structure to calm antitrust concerns

Nvidia avoided calling its latest decision an acquisition while still spending $20 billion to secure people and technology from Groq, the startup it did acquire.

The deal surfaced two days ago and landed quietly, as Cryptopolitan reported. No press release showed up. No regulatory filing followed.

The only public confirmation we got later on came from a 90-word Groq blog post published after markets closed early for the holiday.

Analyst Stacy Rasgon from Bernstein said that Nvidia is now so large it can close a $20 billion agreement on Christmas Eve and the market barely reacts, because really, stocks pretended not to see what’s gong on.

Deal structure pulls Groq leaders and assets without a formal takeover

CNBC reported that Nvidia agreed to buy selected Groq assets for $20 billion in cash, based on details shared by lead investor Alex Davis. Davis runs Disruptive and said his firm invested more than $500 million into Groq. Disruptive also led the company’s most recent funding round in September, which valued the startup at $6.9 billion.

Groq said its founder and chief executive Jonathan Ross, company president Sunny Madra, and several senior leaders will join Nvidia to help scale the licensed technology. The post also stated that Groq will keep operating as an independent business. Simon Edwards, the company’s finance chief, will lead what remains of the firm.

If this had been a clean acquisition, it would have been the largest in Nvidia’s 32-year history. The company’s biggest past deal was the 2019 Mellanox purchase, which came in just under $7 billion. This time, the structure looks different by design. The agreement is labeled a non-exclusive license, not a takeover.

That setup follows a recent pattern across Big Tech. Companies are spending billions to bring in AI talent and hardware knowledge without triggering full merger reviews. Meta, Google, Microsoft, and Amazon have all used similar approaches. Nvidia used the same playbook in September when it paid more than $900 million to hire Enfabrica CEO Rochan Sankar and staff while licensing that startup’s technology.

Cryptopolitan has analyzed that this format helps deals close faster, while also limiting direct antitrust exposure.

Per data from Yahoo Finance, NVDA surged by 1.3% on Friday’s closing bell at $190.53, and the stock is up 42% this year and has climbed more than 13x since the end of 2022 when OpenAI first released ChatGPT.

According to Nvidia’s last earnings report in Q3 2025, the most valuable company on earth holds $60.6 billion in cash and short-term investments, which is massively up from the $13.3 billion it had just 2 and a half years ago in Q3 2023.

Nvidia is playing it smart with Groq deal; offense and defense

Groq was founded in 2016 by former engineers, including Ross, who helped create Google’s tensor processing units, or TPUs, which some firms use instead of graphics processors. Groq focuses on inference, where AI models respond to new data. Nvidia controls most of the training side, where models learn from massive data sets.

Cantor analysts said the deal lets Nvidia play offense and defense at the same time, writing that pulling Groq assets in-house prevents rivals from gaining access. The Howard Lutnick-owned company kept its buy rating and raised its price target to $300.

BofA also kept a buy rating on NVDA with a $275 target, describing the Groq deal as surprising, expensive, and strategic. They also said that GPU dominance in training does not guarantee control of inference, which may need more specialized chips.

Questions remain unresolved. Analysts asked who owns Groq’s language processing unit intellectual property. They also questioned whether that technology can be licensed to competitors and whether Groq’s remaining cloud business could undercut pricing tied to Nvidia’s LPU services.

The next chance for public comments will likely come on Jan. 5, when Nvidia CEO Jensen Huang speaks at CES in Las Vegas.

Meanwhile, these Magnificent 7 stocks are up 27% year-to-date, following gains of 107% in 2023 and 67% in 2024. Since early 2023, their shares are up 338% and drove 45% of the S&P 500’s 18% return this year. Their combined value now sits at $21 trillion, or 34% of the index, per data from S&P Global’s Dow Jones Industrial.

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