Groq

“And so, in 2016, when Grok started, we decided that we were not going to do business in China. This was not a geopolitical decision. This was purely commercial.”

“I don't know that Nvidia will ever see it this way, but I do think that those of us focusing on inference and building stuff specifically for that are probably the best thing that's ever happened for Nvidia stock because we'll take on the low margin, high volu…”

“So we up until recently refused to run any Chinese models.”

“So we store nothing. Like, there is no, like, delete or whatever, like, there is just, we store nothing. We don't even have hard drives, right? Like, we just, we have DRAM, and when the power goes off, everything goes away, right?”

“One of the problems, so we actually block IP addresses from China.”

“And so what's really happening is every time one of these models gets cheaper, we see our developer count just skyrocket. It just like goes up and then it comes back down a little bit, but the slope is higher than when it started.”

“Ah, the recent deployment we did in, in Saudi Arabia 51 days from contract to the first tokens being served in production in country.”

“So rather than using eight chips, we'll use 600 or 3000 for a model.”

“But actually we have a very positive contribution margin right now. And so as far as we know, we're the only ones that are actually making money running these open source models”

“Everyone at Grok carries this twenty five million token per second challenge coin. And what this is, is it tells everyone what we're doing.”

“We actually don't use switches to communicate between our chips. We just plug our chips into our chips. Our chips are the switch.”

“We have a policy that we never offer the highest because we want people to choose us, not choose the salary.”

“Anywhere from, depending on the deal we do get some on the back side, but up front it's about 20%.”

“So the deals that we do the partner will off, because we don't deploy, we don't spend money for our own capex. The partner will put up the money for us to deploy. We pay back with a, you know, decent IRR, and, but we split, and most of it goes to the partner, …”

“Instead of leaving, about 80% of the employees participated, 50%, I think, went to the statutory minimum salary by law.”

“You can almost say we're one of the best things that's ever happened to NVIDIA because they can make every single GPU that they were going to make, and they can sell it for training, high margin, gets amortized across deployment. You know, we'll take the low m…”

“I'm anti-founder mode. I believe in delegation. I think when you are telling people how to do their job, that is an indication that it's not a, not necessarily a problem with you. It could just be that that person is not right for that job.”

“We have 300 people. We built our own chip. We built our own networking hardware and software. We built our own runtime. We built our own orchestration layer. We built our own compiler. We built our own cloud. We built all this with 300 people.”

“More than five x lower. Just the memory alone in the latest GPUs costs more than our fully loaded CapEx per chip deployed.”

“We were around for seven years before we had product market fit, right?”

“When we started, the first misconception, which people don't hold anymore, is that training was more expensive than inference.”

“It improves at about three X, and the reason is...”

“For us to hit our numbers next year, which I'm not sharing publicly, we're going to gonna need almost all of the capacity of the fab that we're using.”

“We have decided that we're not going to train our own models. We'll do a little fine tuning for specific cases or whatnot, but we don't want to compete.”

“So we use about a third of the energy per token. About over a three-year period, one-third of our cost is the OpEx, which is mostly energy and data center rent, and two-thirds is the CapEx, which means that since we're one-third of the energy, the cost to run …”

“This year we want to be at over two million, and next year the number is much, much, much larger.”

“We started 2024 with about 640 chips in production. We ended with over 40,000.”

“And our goal by the end of 20, 27 is to be providing at least half of the world's AI inference compute.”

“We don't really have people saying, you know, we're gonna buy GPUs instead of you. We do have people saying we're gonna buy both.”

“Actually, that's why Grok achieves, ah, not Grok, but Grok, Cerebras, and all these folks, they achieve very high performance single stream is because the data is right in the chip that doesn't have to get it from memory, which is slow, which GPU has to do.”

“Our engineers recently started using codecs more than using the Anthropic tools.”

“Yeah, but I don't sell shares, so. ... Never.”

“We're looking at upgrading chips about once a year.”

“So we raised seven hundred fifty million. ... Yeah, almost seven billion.”

“Our focus is purely on execution right now. Whether or not you go public, you know, that's like that's a completely different game than we're playing right now. Right now, all that matters is can we satisfy the demand for compute?”

“I mean, with this fundraise, we ended up raising you know, more than twice what we were, you know, expecting to raise, and then we were forex oversubscribed over over what we did raise, and so we could have raised a lot more money, it would have been more dilu…”

“So we have when we sell hardware, those hardware units actually have positive margin.”

“PE firms are all over us. They want access to cheap AI compute, because every time they get more cheap AI compute, they can bring the, they can change the bottom line of their businesses.”

“We don't have the same supply chain constraints. We can build more compute than anyone else in the world. The most finite resource right now, compute, the thing that people are bidding up and paying these high margins for, we can produce nearly unlimited quant…”

“We have a philosophy, we don't tell our engineers what tools to use. We do tell them you must use AI, because otherwise you're just not going to be competitive.”

“And coding is gonna become the same thing. For you to be in marketing, you're gonna have to be able to code. For you to be in customer service, you're gonna have to be code be able to code.”

“We're now at 13 data centers. We have data centers in the United States, in Canada, in Europe in the Middle East.”

“It is, in fact we were only gonna raise three hundred million”

“Four hours later, it was in production. Not a single line of code was written by a human being. There was no debugging done by a human being. It was all prompting.”

“In our case we found an area where we will not compete with our customers, which is we will not create our own models. So we just won't do it.”

“Like I said, last week someone came to us and asked for five times our total capacity.”

“I mean, we have 2.2 million developers on us now. That's how many have signed up.”

“I want my margin to be as low as I possibly can make it while keeping my business stable, and I'm going to make my cash flow by increasing the volume.”

“You have to write a check two years in advance to get GPUs. For us, you write us a check for a million LPUs, and the first of those LPUs starts showing up six months later.”

“As I said, four million dollars in 23, forty-ish in 24.”

“Grok being acquired for twenty billion in cash. It happened just before Christmas. Chamath obviously coming out as one of the big winners. Price is three X more than the last round price.”

“One, they could do, they could just deprecate the entire product line and do something brand new. They probably will.”

“He reached out to Jonathan Ross literally just weeks ago, and the deal closed for twenty billion within two weeks. And he told his whole team, I want it done before Christmas, and it was done ahead of time.”

“So from the banker process of, you know, you use comps to justify value, now you've got the world's best comp. Right? And believe me, they'll be using it, right?”

“They're at a hundred and seventy-five million in revenue, so that would be quite an AR multiple to get to where they are.”

“My guess is marginally net positive, but kind of, it's like the real, it's one of those weird things where you ask, is it a positive or negative? The truth is there's a big embedded positive, the comp, and there's a big embedded negative, the musical chair pro…”

“I don't think there's going to be 10 more semis. There might be two.”