Nvidia’s $20 billion strategic licensing cope with Groq represents one of many first clear strikes in a four-front combat over the long run AI stack. 2026 is when that combat turns into apparent to enterprise builders.
For the technical decision-makers we discuss to day by day — the individuals constructing the AI functions and the information pipelines that drive them — this deal is a sign that the period of the one-size-fits-all GPU because the default AI inference reply is ending.
We’re getting into the age of the Disaggregated Inference Structure, the place the silicon itself is being break up into two differing kinds to accommodate a world that calls for each large context and instantaneous reasoning.
Why inference is breaking the GPU structure in two
To grasp why Nvidia CEO Jensen Huang dropped one-third of his reported $60 billion money pile on a licensing deal, it’s a must to have a look at the existential threats converging on his firm’s reported 92% market share.
The business reached a tipping level in late 2025: For the primary time, inference — the section the place educated fashions truly run — surpassed coaching by way of whole information middle income, in keeping with Deloitte. On this new "Inference Flip," the metrics have modified. Whereas accuracy stays the baseline, the battle is now being fought over latency and the flexibility to keep up "state" in autonomous brokers.
There are 4 fronts of that battle, and every entrance factors to the identical conclusion: Inference workloads are fragmenting quicker than GPUs can generalize.
1. Breaking the GPU in two: Prefill vs. decode
Gavin Baker, an investor in Groq (and subsequently biased, but in addition unusually fluent on the structure), summarized the core driver of the Groq deal cleanly: “Inference is disaggregating into prefill and decode.”
Prefill and decode are two distinct phases:
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The prefill section: Consider this because the consumer’s "immediate" stage. The mannequin should ingest large quantities of knowledge — whether or not it's a 100,000-line codebase or an hour of video — and compute a contextual understanding. That is "compute-bound," requiring large matrix multiplication that Nvidia’s GPUs are traditionally glorious at.
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The technology (decode) section: That is the precise token-by-token "technology.” As soon as the immediate is ingested, the mannequin generates one phrase (or token) at a time, feeding every one again into the system to foretell the subsequent. That is "memory-bandwidth sure." If the information can't transfer from the reminiscence to the processor quick sufficient, the mannequin stutters, regardless of how highly effective the GPU is. (That is the place Nvidia was weak, and the place Groq’s particular language processing unit (LPU) and its associated SRAM reminiscence, shines. Extra on that in a bit.)
Nvidia has introduced an upcoming Vera Rubin household of chips that it’s architecting particularly to deal with this break up. The Rubin CPX element of this household is the designated "prefill" workhorse, optimized for large context home windows of 1 million tokens or extra. To deal with this scale affordably, it strikes away from the eye-watering expense of excessive bandwidth reminiscence (HBM) — Nvidia’s present gold-standard reminiscence that sits proper subsequent to the GPU die — and as an alternative makes use of 128GB of a brand new form of reminiscence, GDDR7. Whereas HBM offers excessive velocity (although not as fast as Groq’s static random-access reminiscence (SRAM)), its provide on GPUs is proscribed and its price is a barrier to scale; GDDR7 offers a more cost effective solution to ingest large datasets.
In the meantime, the "Groq-flavored" silicon, which Nvidia is integrating into its inference roadmap, will function the high-speed "decode" engine. That is about neutralizing a menace from different architectures like Google's TPUs and sustaining the dominance of CUDA, Nvidia’s software program ecosystem that has served as its main moat for over a decade.
All of this was sufficient for Baker, the Groq investor, to foretell that Nvidia’s transfer to license Groq will trigger all different specialised AI chips to be canceled — that’s, outdoors of Google’s TPU, Tesla’s AI5, and AWS’s Trainium.
2. The differentiated energy of SRAM
On the coronary heart of Groq’s know-how is SRAM. Not like the DRAM present in your PC or the HBM on an Nvidia H100 GPU, SRAM is etched immediately into the logic of the processor.
Michael Stewart, managing associate of Microsoft’s enterprise fund, M12, describes SRAM as the very best for transferring information over brief distances with minimal power. "The power to maneuver a bit in SRAM is like 0.1 picojoules or much less," Stewart stated. "To maneuver it between DRAM and the processor is extra like 20 to 100 occasions worse."
On the earth of 2026, the place brokers should purpose in real-time, SRAM acts as the final word "scratchpad": a high-speed workspace the place the mannequin can manipulate symbolic operations and complicated reasoning processes with out the "wasted cycles" of exterior reminiscence shuttling.
Nonetheless, SRAM has a serious disadvantage: it’s bodily cumbersome and costly to fabricate, that means its capability is proscribed in comparison with DRAM. That is the place Val Bercovici, chief AI officer at Weka, one other firm providing reminiscence for GPUs, sees the market segmenting.
Groq-friendly AI workloads — the place SRAM has the benefit — are people who use small fashions of 8 billion parameters and beneath, Bercovici stated. This isn’t a small market, although. “It’s only a large market phase that was not served by Nvidia, which was edge inference, low latency, robotics, voice, IoT gadgets — issues we would like working on our telephones with out the cloud for comfort, efficiency, or privateness," he stated.
This 8B "candy spot" is important as a result of 2025 noticed an explosion in mannequin distillation, the place many enterprise firms are shrinking large fashions into extremely environment friendly smaller variations. Whereas SRAM isn't sensible for the trillion-parameter "frontier" fashions, it’s excellent for these smaller, high-velocity fashions.
3. The Anthropic menace: The rise of the ‘moveable stack’
Maybe probably the most under-appreciated driver of this deal is Anthropic’s success in making its stack moveable throughout accelerators.
The corporate has pioneered a transportable engineering method for coaching and inference — mainly a software program layer that enables its Claude fashions to run throughout a number of AI accelerator households — together with Nvidia’s GPUs and Google’s Ironwood TPUs. Till lately, Nvidia's dominance was protected as a result of working high-performance fashions outdoors of the Nvidia stack was a technical nightmare. “It’s Anthropic,” Weka’s Bercovici instructed me. “The truth that Anthropic was in a position to … construct up a software program stack that would work on TPUs in addition to on GPUs, I don’t suppose that’s being appreciated sufficient within the market.”
(Disclosure: Weka has been a sponsor of VentureBeat occasions.)
Anthropic lately dedicated to accessing as much as 1 million TPUs from Google, representing over a gigawatt of compute capability. This multi-platform method ensures the corporate isn't held hostage by Nvidia's pricing or provide constraints. So for Nvidia, the Groq deal is equally a defensive transfer. By integrating Groq’s ultra-fast inference IP, Nvidia is ensuring that probably the most performance-sensitive workloads — like these working small fashions or as a part of real-time brokers — might be accommodated inside Nvidia’s CUDA ecosystem, at the same time as opponents attempt to leap ship to Google's Ironwood TPUs. CUDA is the particular software program Nvidia offers to builders to combine GPUs.
4. The agentic ‘statehood’ struggle: Manus and the KV Cache
The timing of this Groq deal coincides with Meta’s acquisition of the agent pioneer Manus simply two days in the past. The importance of Manus was partly its obsession with statefulness.
If an agent can’t bear in mind what it did 10 steps in the past, it’s ineffective for real-world duties like market analysis or software program improvement. KV Cache (Key-Worth Cache) is the "short-term reminiscence" that an LLM builds through the prefill section.
Manus reported that for production-grade brokers, the ratio of enter tokens to output tokens can attain 100:1. This implies for each phrase an agent says, it’s "pondering" and "remembering" 100 others. On this setting, the KV Cache hit price is the only most necessary metric for a manufacturing agent, Manus stated. If that cache is "evicted" from reminiscence, the agent loses its prepare of thought, and the mannequin should burn large power to recompute the immediate.
Groq’s SRAM is usually a "scratchpad" for these brokers — though, once more, principally for smaller fashions — as a result of it permits for the near-instant retrieval of that state. Mixed with Nvidia's Dynamo framework and the KVBM, Nvidia is constructing an "inference working system" that may tier this state throughout SRAM, DRAM, and different flash-based choices like that from Bercovici’s Weka.
Thomas Jorgensen, senior director of Expertise Enablement at Supermicro, which focuses on constructing clusters of GPUs for big enterprise firms, instructed me in September that compute is now not the first bottleneck for superior clusters. Feeding information to GPUs was the bottleneck, and breaking that bottleneck requires reminiscence.
"The entire cluster is now the pc," Jorgensen stated. "Networking turns into an inner a part of the beast … feeding the beast with information is turning into more durable as a result of the bandwidth between GPUs is rising quicker than anything."
For this reason Nvidia is pushing into disaggregated inference. By separating the workloads, enterprise functions can use specialised storage tiers to feed information at memory-class efficiency, whereas the specialised "Groq-inside" silicon handles the high-speed token technology.
The decision for 2026
We’re getting into an period of maximum specialization. For many years, incumbents might win by delivery one dominant general-purpose structure — and their blind spot was typically what they ignored on the sides. Intel’s lengthy neglect of low-power is the basic instance, Michael Stewart, managing associate of Microsoft’s enterprise fund M12, instructed me. Nvidia is signaling it received’t repeat that mistake. “If even the chief, even the lion of the jungle will purchase expertise, will purchase know-how — it’s an indication that the entire market is simply wanting extra choices,” Stewart stated.
For technical leaders, the message is to cease architecting your stack prefer it’s one rack, one accelerator, one reply. In 2026, benefit will go to the groups that label workloads explicitly — and route them to the suitable tier:
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prefill-heavy vs. decode-heavy
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long-context vs. short-context
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interactive vs. batch
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small-model vs. large-model
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edge constraints vs. data-center assumptions
Your structure will comply with these labels. In 2026, “GPU technique” stops being a buying choice and turns into a routing choice. The winners received’t ask which chip they purchased — they’ll ask the place each token ran, and why.
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