Groq secures $1.5 billion investment from Saudi Arabia for AI expansion

Founded in Silicon Valley by a former Alphabet AI chip engineer, Groq has been developing cutting-edge processors optimized for the execution of pre-trained AI models

US-based semiconductor startup Groq, which specializes in AI inference chips, has secured a major USD 1.5 billion investment from Saudi Arabia. The announcement, made at the LEAP 2025 technology conference, marks a significant step forward for the startup as it aims to enhance its presence in the Middle East, particularly in the rapidly growing AI sector.

Founded in Silicon Valley by a former Alphabet AI chip engineer, Groq has been developing cutting-edge processors optimized for the execution of pre-trained AI models. Known for its high-performance chips, which are particularly effective for applications like large language models and chatbots, Groq has made significant strides in the AI semiconductor industry.

The recent investment will support Groq’s operational expansion in Saudi Arabia, specifically boosting its data center in Dammam. In December 2024, the company entered into a strategic partnership with Aramco Digital, the technology arm of Saudi oil giant Aramco, to establish a robust AI hub in the country. This collaboration has already set the stage for Groq’s deeper involvement in the Middle East, and the new funding will further bolster its capabilities in the region.

Groq expands AI presence in Saudi Arabia

Despite facing US export controls, Groq has successfully secured the necessary licenses to ship its AI chips to Saudi Arabia, enabling it to meet the growing demand for AI solutions in the region.

The expanded Dammam data center will play a key role in supporting the development of Allam, an AI language model created by the Saudi government to function in both Arabic and English. This AI-driven project aligns with Saudi Arabia’s ambitious Vision 2030 plan, which aims to diversify the economy and establish the kingdom as a global leader in technology and AI.

In addition to this strategic investment, Groq has recently experienced significant growth in its funding rounds. In August 2024, the startup raised USD 640 million from major investors, including Cisco Investments, Samsung Catalyst Fund, and BlackRock Private Equity Partners. This investment round valued Groq at USD 2.8 billion, signalling the company’s growing influence in the AI chip sector.

With the backing of Saudi Arabia and other prominent investors, Groq is well-positioned to expand its reach in the global AI market, strengthen its position in the Middle East, and contribute to the region’s technological advancement.