AI Chip Startup Groq Secures $1.5 Billion Investment from Saudi Arabia

U.S.-based semiconductor startup Groq has announced a $1.5 billion investment from Saudi Arabia, aimed at expanding the delivery of its advanced AI chips to the region. The Silicon Valley firm, founded by a former AI chip engineer from Alphabet, specializes in AI inference chips designed to optimize speed and execute commands for pre-trained models.

This investment will help Groq grow its data center in Dammam, bolstering its role in Saudi Arabia’s rapidly expanding AI ecosystem. Groq’s chips, known for powering fast responses in chatbots and large language models, are subject to U.S. export controls. However, the company confirmed it has secured the necessary licenses to ship its technology to Dammam.

The funding was unveiled during LEAP 2025, Saudi Arabia’s global tech event, where the kingdom announced a total of $14.9 billion in new AI investments. Groq’s existing partnership with Aramco Digital, the tech subsidiary of oil giant Aramco, has already led to the creation of a major AI hub in the region last December.

One key technology supported by the Dammam data center will be Allam, a bilingual AI language model developed by the Saudi government that functions in both Arabic and English.

This isn’t Groq’s first major financial milestone. In August, the company reached a $2.8 billion valuation after raising $640 million in a funding round led by Cisco Investments, Samsung Catalyst Fund, and BlackRock Private Equity Partners.

Looking Ahead

Groq’s expanding presence in Saudi Arabia highlights the kingdom’s growing ambition to become a global AI hub. With major investments like this, Saudi Arabia is positioning itself at the forefront of technological innovation in the Middle East, blending local AI development like Allam with cutting-edge hardware from international partners.

Clarification

Groq (with a Q) is a semiconductor company specializing in AI chips. It is not related to Grok (with a K), Elon Musk’s AI chatbot developed by xAI. Due to the similarity in their names, these two companies are sometimes mistakenly associated.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.