Key points
- Groq's price would be about 2.5 times its August value
- Groq's chairman projects eightfold revenue growth next year
- CoreWeave and Nebius report earnings next week
Groq, the AI cloud company backed by Nvidia (NVDA), is approaching investors about a funding round at an $8 billion valuation, Bloomberg reported on Nov. 6. That's about 2.5 times its $3.15 billion valuation in August. Both figures are before the new money.
Executive Chairman Alex Davis has contacted investors about the Series B round, according to documents described in the report. He argued that Groq can grow its margins without taking on much debt and criticized rivals for piling up financial obligations, Investing.com reported in a summary.
Groq and Disruptive, Davis's investment firm, declined to comment. The portion of Bloomberg's report we could read and the summary don't say how much Groq wants to raise or name a lead investor.
Groq's valuation has swung since the Nvidia deal
| Date | Event | Valuation |
|---|---|---|
| Sept. 2025 | Last valuation before the Nvidia deal | $6.9 billion after the money |
| Dec. 2025 | $20 billion Nvidia licensing deal; founder Jonathan Ross leaves for Nvidia | Not applicable |
| June 2026 | $650 million round starts the move into cloud services | Not in the reports we read |
| Aug. 2026 | $350 million round led by Disruptive | $3.15 billion before the money (Bloomberg), $3.5 billion after (TechCrunch) |
| Nov. 2026 | Series B talks reported | $8 billion before the money |
Bloomberg's headline says double. Counting the $350 million, Groq's August value was about $3.5 billion, so $8 billion would be about 2.3 times that, by our calculations. It would also top the $6.9 billion from September 2025, a figure that included that round's money and came before the Nvidia deal changed Groq's business.
Groq looks different now. It used to build its own chips to compete with Nvidia. After Nvidia hired Ross and other staff, Groq became a cloud and data center provider that runs Nvidia systems. In August, TechCrunch reported that it operated 13 data centers and planned to grow from 54 megawatts to more than 200 megawatts in 2027.
Davis has two roles in the raise. Disruptive led the August round, and he's also Groq's executive chairman.
Davis pitches Groq against debt-heavy neoclouds
Groq is now a neocloud, one of the newer companies that rent out AI computing power. Its pitch arrives as investors question how the group pays for its data centers.
CoreWeave (CRWV) sold notes due 2032 in June, and those bonds now yield more than 16%. CoreWeave shares rebounded 6.3% to close at $46.40 on Nov. 6, while Nebius (NBIS) rose 7.6% to $129.49.
Davis has made a similar argument in public. "I could see a lot of people getting hurt putting a lot of debt on these projects," he said in an interview with Sources.
Davis also sent investors a letter with projections. He expects revenue to rise eightfold next year and sees earnings before interest, taxes, depreciation, and amortization reaching $2 billion by 2028. Groq's financials are private, and the summary gives no current revenue figure to measure that against.
Groq's business is focused on inference computing, the work of running AI models, particularly for cybersecurity uses.
Groq also has an open legal fight. Two former engineers sued its board in October over the Nvidia deal, and Groq has called the suit meritless.
Next week gives investors fresh numbers from the listed neoclouds. CoreWeave reports third-quarter results on Nov. 10, and Nebius follows on Nov. 12.
