Groq cuts 2025 revenue projection by $1.5bn, dealing blow to Samsung Foundry

Samsung may have just secured a major win with its deal to produce Tesla’s “AI6” chipset, but it’s not all good news. According to Business Korea, citing The Information, Groq—a U.S. AI chip startup backed by Samsung Electronics—has sharply lowered its 2025 revenue forecast from USD 2 billion to USD 500 million.

As the report indicates, this marks a setback for Samsung Electronics, which has positioned Groq as a key foundry partner. Groq is manufacturing its Language Processing Unit (LPU) using Samsung’s 4nm SF4X process. The report also notes that Samsung joined Groq’s USD 640 million Series D round in August 2024 via its Samsung Catalyst Fund (SCF).

Meanwhile, TechCrunch, citing Bloomberg, reports that Groq is in talks to raise another USD 600 million at a valuation near USD 6 billion. However, sources indicate that the deal is not yet finalized and terms may still change.

Behind Groq’s revenue downgrade
According to Business Korea, industry sources suggest that Groq’s USD 1.5 billion supply deal with Saudi Arabia, signed in February, has likely been delayed—potentially contributing to the revised forecast. The Information adds that after the agreement, Saudi Arabia began importing AI chips from NVIDIA and AMD instead, intensifying competition for data center capacity in the region.

Business Korea also highlights continued uncertainty over Groq’s chipset deliveries next year. The company recently told investors it expects USD 1.2 billion in revenue for 2026, and USD 1.9 billion for 2027. While this marks solid growth from this year’s projected USD 500 million, the figures remain modest considering Groq’s ambitions to rival NVIDIA and AMD. For context, The Information notes that NVIDIA posted USD 44.06 billion in revenue in just the first quarter of this year (February–April).

Challenges facing ASIC startups Like Groq
Groq’s muted outlook underscores the fact that AI-specific semiconductors (ASICs) still occupy a niche segment in a market largely dominated by NVIDIA, according to Business Korea. The Information mentions that Cerebras—another AI chip designer and Groq competitor—has canceled plans for an IPO this year, and is seeking an additional USD 1 billion in funding.

Cerebras counts Middle Eastern tech firm G42 among its key clients, the report adds. The report further notes that Amazon, Microsoft, and Google Cloud are developing and using their own AI chips, which continues to shrink the already limited market for ASIC-focused startups like Groq.

-- Source: TrendForce, Taiwan.