Nvidia hollowed out Groq. Here's what happened to the company left behind.

Groq founder Jonathan Ross is now Nvidia's chief software architect.

Bloomberg/Getty Images Nvidia hollowed out the chip startup Groq, leaving behind a $3.5 billion company.

Some customers said support and AI model choice worsened as Groq scrambled to reinvent itself.

Groq's new bet: It doesn't need a moat to win.

After Nvidia carved up much of Groq, the AI chip startup is now eyeing its next act.

So what's left? A $3.5 billion AI cloud with real infrastructure — and a harder fight to stand out without the signature chips that once made it a viable Nvidia challenger .

Last December, Nvidia paid roughly $20 billion to license Groq's signature chip architecture and hire its leadership, stopping short of a full acquisition.

It was one of Nvidia's biggest deals ever and strengthened its position in inference — the fast-growing market for running AI models, where rivals have gained more ground than in training.

Groq 2.0 has lost some of what once made it stand out.

Some customers said technical support and AI model choice worsened after the deal.

And as inference becomes commoditized, price and speed increasingly matter more than which company provides it.

The unusual structure has also drawn scrutiny, with the Justice Department investigating whether it was designed to skirt antitrust review, The New York Times reported.

Nvidia said in a statement that the deal was "the American system working as designed." The surviving entity is hardly an empty shell.

Groq has 13 data centers, plans to quadruple capacity next year, and 6 million developers and thousands of companies using its cloud.