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Nvidia AI challenger Groq announces European expansion — Helsinki data center targets burgeoning AI market

Groq Spokesperson on a stage
(Image credit: Getty Images / Bloomberg)

American AI hardware and software firm, Groq (not to be confused with Elon Musk's AI venture, Grok), has announced it's establishing its first data center in Europe as part of its efforts to compete in the rapidly expanding AI industry in the EU market, as per CNBC. It's looking to capture a sizeable portion of the inference market, leveraging its efficient Language Processing Unit (LPU), application-specific integrated circuit (ASIC) chips to offer fast, efficient inference that it claims will outcompete the GPU-driven alternatives.

"We decided about four weeks ago to build a data center in Helsinki, and we're actually unloading racks into it right now," Groq CEO Jonathan Ross said in his interview with CNBC. "We expect to be serving traffic to it by the end of this week. That's built fast, and it's a very different proposition than what you see in the rest of the market."

Fierce competition

AMD AI servers

(Image credit: Moreh)

Ross claimed Groq was ready for its own smaller, upstart competition too. Suggesting that even as hot as AI inference industry is, Groq should come out ahead of startups beginning to build their alternative offerings.

"You'll get lots of startups popping up, but building an AI chip is expensive. You're going to (be) spending anywhere from a quarter to half a billion dollars to get that thing to market, and you can't fund everyone to do that." Ross continued.

When the interviewer pressed about staff retention, highlighting the problems OpenAI had recently faced with Meta poaching staff with large signing bonuses, Ross appeared as unconcerned as Sam Altman (despite losing researchers to Meta's efforts).

"I think we've had an easier time finding and retaining talent, because we're a little adjacent to the AI research space [...] That said, it is a hot industry, and there is a lot of pull for the best talent. In our case, I think a lot of people view us as having a very high growth trajectory to be successful, and they'd like to be on that path, so people join us very much for the equity and growth potential."

Regardless of any potential staffing issues, though, Groq is likely to receive a warm welcome in Europe, with many countries in the EU and the UK looking to invest heavily in AI inference data centers in the coming years, as they look to compete with US and Chinese efforts.

If this data center can truly start effectively serving customers within weeks of decision makers launching the endeavour, it's unlikely to be the last. However, the power and speed of adoption for Groq will remain crucial to the company's future success. Nvidia made $35.6 billion from the last quarter in data center hardware alone, while AMD made $3.7 billion. If Groq wants to be a meaningful competitor in the space, the company needs to appeal to customers and companies looking to build their own ASIC solutions for AI workloads, which is a very specific subsection of the market.

Groq would also require an answer to how scalable their hardware is too, as potential hyperscalers looking for an ASIC solution will be watching the company closely. This is in tandem with potential competition from other, more established ASIC businesses, such as Broadcom, Marvell, and Mediatek. If Groq should prove itself worthy, then it might become a part of the same cohort of indirect Nvidia competitors, looking for a slice of the extremely hot AI pie.

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Jon Martindale
Freelance Writer

Jon Martindale is a contributing writer for Tom's Hardware. For the past 20 years, he's been writing about PC components, emerging technologies, and the latest software advances. His deep and broad journalistic experience gives him unique insights into the most exciting technology trends of today and tomorrow.