Groq Secures $1.5 Billion Commitment from Saudi Arabia

By Stephen Nellis

(Reuters) – U.S. semiconductor startup Groq announced on Monday that it has secured a $1.5 billion commitment from Saudi Arabia to enhance the delivery of its advanced AI chips to the country.

The Silicon Valley firm, founded by a former Alphabet (NASDAQ: GOOGL) AI chip engineer, specializes in AI inference chips that optimize speed and execute commands of pre-trained models.

Groq currently has an agreement with Aramco (TADAWUL: 2222) Digital, the technology subsidiary of oil giant Aramco, with whom they established a crucial AI hub in the region in December.

According to Groq, it will receive funding throughout this year to expand its existing data center in Dammam. The company’s chips, designed for rapid responses from chatbots and large language models, are subject to U.S. export controls, but Groq confirmed it has secured the necessary licenses to ship them to Dammam.

The funding commitment was announced during Saudi Arabia’s global technology event, LEAP 2025, at which the country acquired $14.9 billion in new AI investments.

One of the technologies supported by the Dammam data center is an AI language model called Allam, developed by the Saudi government, capable of operating in both Arabic and English.

In August, Groq achieved a valuation of $2.8 billion after raising $640 million in a funding round led by Cisco (NASDAQ: CSCO) Investments, Samsung (KS: 005930) Catalyst Fund, and BlackRock (NYSE: BLK) Private Equity Partners.