Groq's Business Model, Part 3: Competing with Google, AWS, Microsoft

Advantages and Disadvantages of Competing Against The Big Dogs

Groq is traditionally considered an Nvidia competitor but also competes against cloud service providers (CSPs) like Google, AWS, and Microsoft. Let’s study how Groq’s inference API and hardware leasing offerings compete.

Context

In Part 2 of Groq’s Business Model, we explored how Groq utilizes its inventory to power a tokens-as-a-service offering. Moreover, Groq can lease underutilized inventory and provide colocation services in its data center facilities, creating a recurring revenue stream. Finally, Groq still conducts traditional hardware sales, for example, by selling racks of LPUs for data centers in Norway and Saudi Arabia. 

A mental model for these revenue streams is a “ramp to hardware”:

Groq’s offerings progressively address more of the customer journey; consuming an inference API is much less burdensome than buying servers.