Groq, an AI chip startup, announced Monday the establishment of its first European data center in Helsinki, Finland, in partnership with Equinix, as part of its international expansion efforts.
The move allows Groq to capitalize on growing demand for AI services in Europe, following similar investments by other U.S. firms. The Nordic region is desirable for data facilities because of its access to renewable energy and cooler climates. Last month, Nvidia CEO Jensen Huang signed several infrastructure deals in Europe, including data center agreements.
Groq, valued at $2.8 billion and backed by investment arms of Samsung and Cisco, designs language processing units (LPUs) intended for inferencing rather than training. Inferencing involves a pre-trained AI model interpreting live data to produce results, such as those from chatbots.
While Nvidia dominates the market for chips required to train AI models using graphics processing units (GPUs), Groq is among several startups, including SambaNova, Ampere (which SoftBank is acquiring), Cerebras, and Fractile, aiming to gain market share in AI inference.
According to CEO Jonathan Ross, Groq is seeking to differentiate itself from competitors, including Nvidia, in several areas. Ross stated in a Monday interview with CNBC that Nvidia chips use expensive components, such as high-bandwidth memory, with limited suppliers. In contrast, Groq’s LPUs do not use these chips, and its supply chain is primarily based in North America.
Groq sparks LPU vs GPU face-off
“We’re not as supply limited, and that’s important for inference, which is very high volume, low margin,” Ross told CNBC’s “Squawk Box Europe.”
Ross added, “And the reason that we’re so good for Nvidia’s shareholders is, we’re happy to take that high volume but lower margin business and let others focus on the high-margin training.”
Ross also emphasized Groq’s rapid deployment capabilities, noting that the company decided to build the Helsinki data center four weeks prior to unloading server racks at the location.
“We expect to be serving traffic starting by the end of this week. That’s built fast and so it’s a very different proposition from what you see in the rest of the market,” Ross said.
European politicians have advocated for sovereign AI, which requires data centers to be located within the region. Data centers closer to users can also improve service speeds. Equinix, a global data center builder, connects cloud providers like Amazon Web Services and Google Cloud, allowing businesses to use multiple vendors. Groq’s LPUs will be installed in the Equinix data center, providing businesses access to Groq’s inference capabilities through Equinix.
Groq currently operates data centers using its technology in the U.S., Canada, and Saudi Arabia.
