Nvidia is set to acquire AI chip startup Groq in a $20 billion deal, as reported by CNBC. This transaction would mark the largest purchase in Nvidia’s history, positioning the company to further solidify its leadership in chip manufacturing.

As technology firms race to enhance their AI systems, the demand for computing power continues to surge. Nvidia’s graphics processing units (GPUs) have become the go-to standard across the industry. However, Groq has been developing an alternative chip known as a language processing unit (LPU), which the company states can operate large language models up to ten times faster while consuming only a tenth of the energy.

Groq’s chief executive, Jonathan Ross, brings a strong background in chip innovation. During his tenure at Google, he contributed to the creation of the tensor processing unit (TPU), a specialized AI accelerator chip.

In a recent funding round last September, Groq secured $750 million, achieving a valuation of $6.9 billion. The company has experienced rapid expansion, reporting that its technology now supports AI applications for over 2 million developers—a substantial increase from approximately 356,000 the previous year.