It’s good that you have done that but does that section make sense? It says there was a 75% revenue cut, but the prior number is valuation, not revenue. Or was valuation and revenue the same at that time (seems unlikely)?

Edit: some searching about suggests that Groq initially projected $2 billion in revenue for 2025, later cutting that forecast to $500 million. That appears to have be what this article is trying to say.

https://www.investing.com/news/company-news/groq-slashes-202...

Any time a forward-looking statement is given in an investment context it has a safe harbor caveat attached about how it could be wrong. Companies miss revenue projections all of the time. That's not fraud.

In private companies, it's much more caveat emptor, than in the public markets.

Almost the entire biotech industry has been this way for decades once the small molecule patent cliff hit pharma and the R&D costs for therapies skyrocketed. If you look at biotech IPOs, the majority of the startups IPO pre-revenue, long before they’re even legally allowed to sell anything.

Which is totally fine: anyone who is a biotech investor knows this and everyone makes tons of money in this arrangement. Investors (both public and private) take on the science risk and some of the regulatory risk, and the pharmaceutical companies provide a guaranteed (big $$$) exit and take over scaling manufacturing to bring a drug to market. Most people with retirement accounts and pensions and index funds rarely touch this stuff except as a diversification strategy that pools the risky stuff to get the upside on the whole industry.

Cadence is one of the big companies in EDA (Electronic Design Automation - semiconductor chip design software)

I met someone that left to go to a startup and was bought by Cadence. He did this 5 times and about 2-3 years later Cadence would buy the startup he was at. He just couldn't get away.

It's low risk from the acquirer's point of view. Somebody else paid for that research, you just get to buy it once it's proven itself sufficiently to your liking.

Well usually they only get acquired when they have something the purchaser wants, revenue was obviously not the get here

It could mean different things I guess, but here’s my take:

If you do very risky R&D in a big corpo then the risk creeps into other things: other projects might look at the R&D and say, “we will just use that when it’s done”. It’s a lazy kind of move for tech leaders to make, because it makes you look like a team player, and if the R&D goes belly up then you have someone else to blame. This ultimately leads to risky R&D in a big corpo not being compartmentalized as much as it should be. If it fails, it fails super hard with lots of fallout.

But risky R&D at a startup is compartmentalized. Nobody will say they use the output of the startup until there are signs of life, and even then healthy caution is applied.

Low risk for the large companies

Maybe the loses are limited to the amount of the investment in the startup? No risk of consuming more resources than intended before dying.

If those things were integrated into the giant there would be political risk of it eating all of the money of the giant.

what exactly they are doing if they don't look at the acquisitions of the biggest company?

Maybe it was not the right term, "acquisition". But really the end-result is the same.

The people now working for Nvidia will keep innovating but now with monopolistic pricing.

The $20B will be paid out to investors. Maybe GroqCloud will keep $1B to keep the lights on for a few years.

> I don't share your view. Groq continues to exist. Nvidia did not take any or their hardware, so the same Groq you access on OpenRouter will exist tomorrow or one year from now. If anything, they'll significantly increase their presence, since they just got $20 billion in cash.

The linked article expects differently:

> Nvidia’s buying them with their insanely inflated war chest. They don’t want a chunk taken out of their market share. They can’t afford to take that chance. So it’s like they’re just saying: “Shut up, take the $20 billion, walk away from this project.”

How much this is true I can't really verify myself but it certainly sounds concerning.

> But you can say that they stifle independent innovation.

But this is exactly what a market watchdog is supposed to prevent. A market with one player (or two) is no market. And Groq was going in a decidedly different direction than Nvidia.

The linked article echoes my worries in other ways as well e.g. worker displacement, explosion of energy usage. I often equate it with the dotcom era, I worked on this thinking we made the world better. But the endgame, with the Google, Meta, pervasive tracking etc is much more dystopian. Especially considering the societal effects. Enshittification, corporate rule, polarisation due to social medias promoting "engagement" and thus conflicting content that get people riled up.

I don't want the same to happen with AI here and it feels like they are already aligning the stars to make exactly that happen.

My first grade teacher used to claim that two wrongs didn't make a right.

> How do the market regulators allow that?

Same way I reckon. Both are bad.

> Funny how everyone shits on Nvidia's monopoly when we've got Google walking around after winning a monumental antitrust case regarding their Android/Chrome/Google information monopoly.

... are you implying people around here don't give google flak for monopolistic business practices? That doesn't square with my experience, here.

Market regulators are working hard to ensure regulatory capture for the big players.

One wrong doesn't make another wrong right.

The average US salary isn't $75k btw. That figure is usually quoted from the reported median household income in 2022[1]. The median personal income, which is the figure that should* be quoted, was around $45k for 2024[2].

[1] https://fred.stlouisfed.org/series/MEHOINUSA646N [2] https://fred.stlouisfed.org/series/MEPAINUSA646N

Most people are not doers but losers. When someone does anything, they like to throw s*t at it.

Doers are perpetually disliked by losers simply because they can do stuff while them can't.

It's natural that the losers' actions are aligned towards making doers disappear, but it's usually a very low level and pathetic threat to doers.

I enjoyed reading your article and hope you have more stuff coming :). Keep it going!

AI is real and it's also hyped. There's circular financing and real money involved. Groq has good tech and smart people and Nvidia is also taking a competitor off the board. People who only see one side have a lack of imagination.

Opinionated and uneducated. A favorite pastime of the internet it's just a shame that we give so much attention to such blogposts.

Thank you for reading it.

We've all been waiting for info about the second gen chip. I assume Nvidia saw something privately (good or bad) that triggered this acquisition.

Can you tell me the last US president to accept literal bars of gold and jumbo jets from foreign monarchs? Or the last one who ran a crypto coin, pardoned a crypto billionaire who he claimed not to know?

> the government has been for sale for a long time

The government has been under significant influence of corporations for a long time: this is true. But now bribes are being accepted unabashedly. Presumably, hopefully, this won't last beyond the current administration. To equate the two is dishonest.

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Or (c) that any future administration is going to have a lot of more pressing concerns that will drown out seriously relitigating past mergers and acquisitions, and any concerns they do have will most likely be mollified with agreed remedies that sacrifice far less than the value of doing the merger.

Very few administrations do everything they theoretically could under the law and their own guidelines (even the ones that also do lots that violates both.)

A quick google search indicates the average tenure of a CEO is ~7 years.

I wonder if there should be a c) There is a lack of meaningful planning beyond the current status quo.

Well there's also a c) - Whatever they get away with now they will have in pocket, and whatever penance they will have to do with a future administration will take years and years of legal back and forth to actually pan out, by which time it will be watered down so any fine will dwarf the profits made during this period.

Also, if they manage to reach "too big to fail" status by that point, whatever punishment will be nothing more than a slap on the wrist.

Was just walking past a construction site and heard some of their banter. Didn’t realise the common man could debate the benefits of an LPU over GPGPU so eloquently. One of them even compared SRAM vs DRAM as being like a cheetah vs an injured antelope ;)

And they aren’t reading you, so lots of wasted words.

Yeah, it's always corrupt. No, it was not always this corrupt. We're aiming for third world. That's going to be a new experience.

Yes, it is different. Pretending it is the same is just another way to defend the corrupt ones.