Groq, an AI chip specialist, announces its first European data center in Helsinki to serve accelerating AI inference demand.

American AI hardware and software firm Groq 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. "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 an 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." The data center, built in partnership with American data center firm Equinix and backed by major investments from Samsung and Cisco, will leverage Groq's efficient Language Processing Unit (LPU) application-specific integrated circuit (ASIC) chips to capture a sizeable portion of the inference market.

Ross positioned Groq as well-equipped to take over the day-to-day running of AI algorithms by powering the inference calculations that allow them to function effectively. "Inference tends to be a higher volume, but lower margin business," he explained. Groq's LPUs, specifically designed for AI inference calculations, use on-chip memory to reduce latency and handle the linear algebraic calculations that large language AI models require. Ross claims that this makes its LPUs both fast and efficient, using around a third of the power of traditional GPU designs to produce the same output. Beyond hardware advantages, Ross emphasized Groq's operational speed: while Nvidia CEO Jensen said at GTC that "if you want to get GPUs in two years, you need to put your Purchase Orders in now," Ross called this "a ridiculous requirement." For Groq, "it's about six months. Which is a fourth of the time, and that totally changes your ability to make predictions about what you need."

Groq's supply chain flexibility provides additional competitive leverage. "Nvidia can only build as many GPUs as it's looking to build this year, because it uses very exotic components like HBM," Ross explained. "We don't use any of that, and so we're not as supply limited, and that's really important for inference." While Nvidia has dominated the professional graphics card space and built a dominant position around its CUDA software stack and CUDA-X platform, Groq argues its LPUs with a simpler design and generic compiler offer leaner, faster, and equally capable hardware and software alternatives. Nvidia has built what CEO Jensen Huang called "AI factories" worldwide, promising hundreds of billions of dollars of investment.

Regarding competition from startups, Ross appeared confident. "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." On staff retention, Ross suggested Groq has had relative advantages. "I think we've had an easier time finding and retaining talent, because we're a little adjacent to the AI research space," he said, appearing unconcerned about competition for talent despite industry-wide poaching efforts, including Meta's recruitment of researchers from OpenAI.