How Nvidia Learned to Stop Worrying and Acquired Groq

0. Preface

On Christmas Eve 2025, the AI world was rocked. Nvidia, the undisputed king of AI hardware, made its largest acquisition to date: a staggering $20 billion bid for Groq, a name few outside the industry had heard of. Why would Nvidia pay such a colossal sum for this dark horse?

I got interested in Groq’s technology and commercial potential since 2023, and have been testing their cloud-based inference service for open source LLM. I’m both excited and not surprised that Groq’s singular focus, killer technology and years of hardwork finally paid off.

This article dives deep into the Groq architecture, revealing why it's shattering LLM inference speed records. We'll pit Groq’s Language Processing Unit (LPU) against the giants: Nvidia GPU and Google TPU, to see if the crown is truly changing hands. Plus, discover the incredible backstory of Groq’s founder & CEO, Jonathan Ross, who happens to be one of the original masterminds behind the very Google TPU that Groq is now challenging.

1. Introduction: The Millisecond Imperative

In modern data centers, the focus is shifting from AI training to AI inference - the instantaneous application of digital minds. For users interacting with Large Language Models (LLMs), the defining constraint is latency. This delay is not a software failure, but a hardware limitation, as existing architectures like the Graphics Processing Unit (GPU) were not designed for token-by-token language generation.

Groq, founded by the architects of Google’s original Tensor Processing Unit (TPU), tackles this specific challenge. Their solution is the Language Processing Unit (LPU), a "software-defined" chip that abandons traditional processor design for speed. By using deterministic, clockwork execution and static scheduling, Groq's LPU breaks the "Memory Wall," achieving text generation speeds exceeding 1,600 tokens per second, vastly outpacing human reading speed.

2. The Inference Crisis: Why Modern AI is "Slow"

To understand Groq’s innovation, one must first appreciate the specific behavior of Large Language Models on current hardware. The computational workload of an AI model changes drastically depending on whether it is learning (training) or thinking (inference).

2.1 The Physics of Autoregressive Generation

Training a model is a high-bandwidth, parallel task. You feed the system thousands of sentences simultaneously, and the chip updates its internal weights based on the aggregate error. It is like grading a thousand exams at once; you can optimize the workflow for throughput.

Inference, however, specifically for LLMs, is "autoregressive." The model generates one word (or token) at a time. It predicts the first word, appends it to the input, predicts the second word, appends it, and so on. This process is inherently serial. You cannot calculate the tenth word until you have calculated the ninth.

For a hardware engineer, this is a nightmare. In a modern GPU architecture, the compute cores (where the math happens) are separated from the memory (where the model lives) by a physical distance. This separation creates the "Von Neumann Bottleneck." Every time the model needs to generate a token, the GPU must fetch the entire model from memory, process it, and send it back.

For a 70-billion parameter model like Llama 3, which can weigh around 140 gigabytes (at 16-bit precision), this means the chip must move 140GB of data across the wire just to generate a single word.3 It must do this over and over again, tens of times per second.

2.2 The Memory Wall

The result is that the most powerful compute engines in the world spend most of their time waiting. This phenomenon is known as the "Memory Wall."

2.3 The Tail Latency Problem

The problem is compounded by the "dynamic" nature of modern processors. CPUs and GPUs are designed to be generalists. They have complex hardware components—caches, branch predictors, out-of-order execution engines—that try to guess what the software wants to do next.

When these guesses are wrong (a "cache miss" or "branch misprediction"), the processor stalls. In a shared data center environment, where multiple users are competing for resources, this leads to "jitter" or variable latency.

Groq’s founding thesis was simple: What if we removed the question mark? What if the chip never had to ask what to do, because it already knew?

3. The Philosophy of the LPU: Software-Defined Hardware

The Language Processing Unit (LPU) is the physical manifestation of a philosophy that rejects the last thirty years of processor evolution. Founded by Jonathan Ross, who previously led the Google TPU project, Groq started with a "Software-First" approach.10

3.1 The Compiler is the Captain

In a traditional system, the compiler (the software that translates code into chip instructions) is subservient to the hardware. It produces a rough guide, and the hardware’s internal logic (schedulers, reorder buffers) figures out the details at runtime.

Groq flips this. The LPU hardware is deliberately "dumb." It has no branch predictors. It has no cache controllers. It has no out-of-order execution logic. It is a massive array of arithmetic units and memory banks that do exactly what they are told, when they are told.11

The intelligence resides entirely in the Groq Compiler.

3.2 The Assembly Line Analogy

To understand the difference, imagine a factory floor.

This architectural choice allows Groq to utilize nearly 100% of its compute capacity for the actual workload, whereas GPUs often run at 30-40% utilization during inference because they are waiting on memory.13

4. Anatomy of the LPU: Deconstructing the Hardware

The physical implementation of the LPU (specifically the GroqChip architecture) is a study in radical trade-offs. It sacrifices density and capacity for raw speed and predictability.

4.1 SRAM: The Speed of Light Storage

The most critical architectural differentiator is the memory. Nvidia and Google use HBM (High Bandwidth Memory), which comes in massive stacks (80GB+) sitting next to the compute die.

Groq uses SRAM (Static Random Access Memory).

4.2 The Capacity Constraint

The trade-off is capacity. A single Groq chip contains only 230 MB of SRAM.12 This is microscopic compared to the 80GB of an H100.

This necessitates a completely different approach to system design. The "computer" is not the chip; the computer is the rack.

4.3 The Tensor Streaming Processor (TSP)

Inside the chip, the architecture is arranged specifically for the linear algebra of Deep Learning.

4.4 TruePoint Numerics

To maximize the limited 230MB of memory, Groq employs a novel precision strategy called TruePoint.

5. The Network is the Computer: RealScale Technology

Because no single LPU can hold a model, the network connecting the chips is as important as the chips themselves. If the connection between Chip A and Chip B is slow, the 80 TB/s of internal bandwidth is wasted.

5.1 RealScale: A Switchless Fabric

Traditional data center networks use Ethernet or InfiniBand switches. When a server sends data, it goes to a switch, which routes it to the destination. This adds latency and introduces the possibility of congestion (traffic jams).

Groq’s RealScale network connects chips directly to each other.

5.2 Tensor Parallelism at Scale

This networking allows Groq to employ Tensor Parallelism efficiently.

6. The Titans Compared: Groq vs. Nvidia vs. Google vs. Cerebras

The AI hardware landscape is a battle of philosophies. We can categorize the major players into three camps: The Generalists (Nvidia), The Hyperscale Specialists (Google), and The Radical Innovators (Groq, Cerebras).

6.1 Nvidia H200 (The Generalist)

6.2 Google TPU v5p (The Hyperscale Specialist)

6.3 Cerebras CS-3 (The Wafer-Scale Giant)

6.4 Groq LPU (The Low-Latency Sniper)

Table 1: Architectural Comparison Summary

Feature

Groq LPU (TSP)

Nvidia H100 (Hopper)

Google TPU v5p

Cerebras CS-3

Primary Focus

Inference (Latency)

Training & Inference

Training & Inference

Training & Inference

Memory Architecture

On-chip SRAM

Off-chip HBM3

Off-chip HBM

On-Wafer SRAM

Memory Bandwidth

80 TB/s (Internal)

3.35 TB/s (External)

~2.7 TB/s

21 PB/s (Internal)

Control Logic

Software (Compiler)

Hardware (Scheduler)

Hybrid (XLA)

Software (Compiler)

Networking

RealScale (Switchless)

NVLink + InfiniBand

ICI (Torus)

SwarmX

Batch-1 Efficiency

Extremely High

Low (Memory Bound)

Medium

High

Llama 3 70B Speed

>1,600 T/s (SpecDec)

~100-300 T/s

~50 T/s (chip)

~450 T/s

1

7. Performance Benchmarks: The Speed of Thought

25 millions tokens per second! I vividly remember hearing this bold prediciton from Jonathan Ross (Groq CEO) in late May 2024, when we invited him to speak at the GenAI Summit Silicon Valley. (Yes I took that photo for record. 🙂) Even though Groq is nowhere near that yet, its performance numbers have been truly impressive.

The theoretical advantages of the LPU have been validated by independent benchmarking, most notably by Artificial Analysis. The numbers reveal a stark divide in performance tiers.

7.1 Throughput and Latency

For the Llama 3 70B model, a standard benchmark for enterprise-grade LLMs:

7.2 The Speculative Decoding Breakthrough

In late 2024, Groq unveiled a capability that widened the gap from a ravine to a canyon: Speculative Decoding. This technique allows Groq to run Llama 3 70B at over 1,660 tokens per second.1

The Mechanism:

Speculative decoding uses a small "Draft Model" (e.g., Llama 8B) to rapidly guess the next few words. The large "Target Model" (Llama 70B) then verifies these guesses in parallel.

7.3 Energy Efficiency

While a rack of 576 chips consumes significant power (likely in the hundreds of kilowatts), the efficiency per unit of work is surprising.

8. The Economics of the LPU: CapEx, OpEx, and TCO

The most controversial aspect of Groq’s architecture is the "Chip Count." Critics argue that needing hundreds of chips to run a model is economically unviable. This requires a nuanced Total Cost of Ownership (TCO) analysis.

8.1 The Cost of the Rack vs. The Cost of the Token

It is true that a Groq rack (running Llama 70B) contains ~576 chips.

8.2 Pricing Strategy

Groq has aggressively priced its API services to prove this point.

8.3 Physical Footprint and Power

The downside is density. Replacing a single 8-GPU Nvidia server with multiple racks of Groq chips consumes significantly more data center floor space and requires robust cooling solutions. This makes Groq less attractive for on-premise deployments where space is tight, but viable for hyperscale cloud providers where floor space is less of a constraint than power efficiency.21

9. Use Cases: Who Needs Instant AI?

Is 1,600 tokens per second necessary? For a human reading a chatbot response, 50 tokens/sec is sufficient. However, the LPU is targeting a new class of applications.

9.1 Agentic AI and Reasoning Loops

Future AI systems will not just answer; they will reason. An "Agent" might need to generate 10,000 words of internal "Chain of Thought" reasoning to answer a single user question.

9.2 Real-Time Voice

Voice conversation requires latency below 200-300ms to feel natural. Any delay creates awkward pauses (the "walkie-talkie" effect).

9.3 Code Generation

Coding assistants often need to read an entire codebase and regenerate large files. A developer waiting 30 seconds for a refactor breaks flow. Groq reduces this to sub-second completion.

10. The Software Stack: Escaping the CUDA Trap

Nvidia’s dominance is largely due to CUDA, its proprietary software platform. Groq knows it cannot win by emulating CUDA.

10.1 The "Hardware-Is-Software" Approach

Groq’s compiler is the heart of the product. It was built before the chip.

11. Conclusion: The Deterministic Future

The Groq LPU's success proves that the Von Neumann architecture is a liability for serial LLM inference. Groq's shift to SRAM and determinism created a machine that operates at the speed of light, enabling Agentic AI—systems capable of thousands of self-correcting reasoning steps in the blink of an eye.

With Nvidia's acquisition of Groq on 12/24/2025, the LPU's proven thesis—that determinism is destiny for future AI speed - will now be integrated into the GPU giant's roadmap. This merger signals a profound shift, acknowledging that raw power is meaningless without the speed and deterministic architecture Groq pioneered to use it effectively.

12. Bonus story - The Architect of Acceleration: Jonathan Ross and the Groq Journey

Jonathan Ross, Groq's founder and CEO, is central to two major AI hardware innovations: the Google TPU and the Groq LPU.

Before Groq, Ross was a key innovator on the Google Tensor Processing Unit (TPU). Introduced publicly in 2016, the TPU was Google's specialized chip for neural network calculations, designed to surpass the limitations of CPUs and GPUs. Ross helped conceptualize the first-generation TPU, which utilized a revolutionary systolic array architecture to maximize computational throughput and power efficiency for AI. His work at Google set the foundation for his later endeavors.

Leaving Google in 2016, Ross founded Groq (originally Think Silicon) with the goal of creating the world's fastest, lowest-latency AI chip with deterministic performance. He recognized that GPU unpredictability - caused by elements like caches and thread scheduling - was a bottleneck for real-time AI. Groq's mission became eliminating these sources of variability.

This philosophy gave rise to Groq’s flagship hardware: the Language Processor Unit (LPU) and its foundational GroqChip. The Groq architecture is a departure from the GPU-centric approach. It features a massive single-core, tiled design where all compute elements are connected by an extremely high-speed, on-chip network.

Groq’s Historical Arc: Ups, Downs, and Pivots

The path from an ambitious startup to a leading AI hardware provider was not linear for Groq. The company’s history is marked by necessary pivots and strategic refinements:

Jonathan Ross’s enduring contribution is the creation of a fundamentally different kind of computer - one engineered for predictable performance at scale. From co-designing the TPU architecture that powered Google’s AI revolution to pioneering the deterministic LPU at Groq, he has consistently championed the idea that the future of AI requires hardware tailored specifically for the workload, not the other way around.

Appendix: Data Tables

Table 2: Economic & Operational Metrics

Metric

Groq LPU Solution

Nvidia H100 Solution

Implication

OpEx (Energy/Token)

1 - 3 Joules

10 - 30 Joules

Groq is greener per task.

CapEx (Initial Cost)

High (Rack scale)

High (Server scale)

Groq requires more hardware units.

Space Efficiency

Low (576 chips/rack)

High (8 chips/server)

Groq requires more floor space.

Cost Efficiency

High (Token/$)

Low/Medium (Token/$)

Groq wins on throughput economics.

Table 3: The Physics of Memory

Memory Type

Used By

Bandwidth

Latency

Density (Transistors/Bit)

SRAM

Groq LPU

~80 TB/s

~1-5 ns

6 (Low Density)

HBM3

Nvidia H100

3.35 TB/s

~100+ ns

1 (High Density)

DDR5

CPUs

~0.1 TB/s

~100+ ns

1 (High Density)

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