Jonathan Ross and Rob Thomas Talk Groq and IBM Partnership

Summary

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Bloomberg Talks: Jonathan Ross and Rob Thomas Talk Groq and IBM Partnership

Date: October 20, 2025
Host: Bloomberg
Guests:

• Jonathan Ross, CEO and Founder, Groq
• Rob Thomas, Senior Vice President of Software & Chief Commercial Officer, IBM

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Episode Overview

This episode centers on the newly announced strategic partnership between Groq, a leader in high-speed, low-latency AI hardware (LPU – Language Processing Units), and tech giant IBM. The discussion explores how this collaboration is designed to provide enterprise customers with unprecedented AI inference capabilities, drastically lowering the cost and time for AI workloads. The conversation dives deep into go-to-market strategies, technical integration, and the broader landscape of AI infrastructure.

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Key Discussion Points & Insights

1. The Strategic Partnership & Go-To-Market Approach

• IBM’s sellers will now offer Groq’s technology (LPU) as part of their portfolio, significantly expanding Groq’s reach to large enterprise clients.

• The analogy used: “Offering broadband when the world is still mostly on dial-up.” (Jonathan Ross, [01:19])

  “Our LPUs are just significantly faster, but we also keep the cost down. Just imagine if you were to offer broadband and you charged more per bit of data that was sent over the line. It would be uneconomical. Broadband increases the demand.”
  – Jonathan Ross ([01:19])

• The goal is to enable “ultra-high speed, low latency AI” for enterprises, especially crucial for real-time, agentic use cases.

2. Economic Structure of the Deal

• IBM’s strategy: Leverage Groq’s hardware to boost the speed and cost-efficiency of its Watson X platform.

• Revenue sharing is confirmed as part of the deal; IBM is looking for 5x performance improvement at 20% of the cost.

  “This partnership is all about what Jonathan said, which is 5x performance at 20% of cost. We've seen it with Watson X running on Groq.”
  – Rob Thomas ([02:23])

• IBM has a $7.5B AI business with Watson X and is focused on helping clients deploy AI faster.

3. Real Client Impact & Adoption

• Use cases include call centers, supply chains, and “multimodal” AI (processing multiple types of data—text, image, etc. simultaneously).

• Financial services have led initial adoption.

  “Some of that changes how your call center operates or how your supply chain runs. And then you combine that with a fraction of the cost, suddenly the economics make sense.”
  – Rob Thomas ([03:13])

• IBM aims to achieve $4.5B in productivity gains using AI internally by year’s end.

4. Technical Integration & User Experience

• Groq’s LPU tech will be invisibly integrated into IBM’s Watson X API.

• Users will experience faster results with no extra effort.

  “It'll be invisible to most users. It'll simply work... You should just get more speed. Just imagine one day you come home, you had dial up, and now you have broadband and it costs less.”
  – Jonathan Ross ([04:13])

• Deeper integration work continues (e.g., on VLLM, a scalable inference library).

5. Demand, Supply, and Scalability

• Global demand for AI compute greatly outpaces supply.

• Groq claims a faster-ramping supply chain, but overall constraints are expected for 5–10 years.

  “The entire world is supply constrained and I would actually expect that to continue for at least the next five to ten years...the sooner you get access to that capacity, the sooner you're going to have it.”
  – Jonathan Ross ([05:45])

• Early access via IBM is advised for customers experiencing rapid growth.

6. Openness vs. Exclusivity in AI Partnerships

• IBM is open to continued partnerships across the AI ecosystem (Anthropic, Mistral, Llama, etc.) even while prioritizing acceleration with Groq.

  “With grok, we are open to working with anybody in the ecosystem of AI...But when you think broadly about what's happening in AI, we have many companies working with us on agents.”
  – Rob Thomas ([06:50])

7. Dual Go-to-Market Channels

• Groq benefits from both “bottoms-up” (developer-led adoption) and “top-down” (enterprise agreements via IBM).

  “I'm in meetings where the CTO did that and the response from the person is, ‘I already use Groq. It's my default for everything.’”
  – Jonathan Ross ([07:54])

• Groq has 2.3 million developers already using their platform.

  “For comparison, OpenAI has 4 million.”
  – Jonathan Ross ([08:07])

• The IBM partnership acts like a “peanut butter and jelly relationship,” combining IBM's reach & trust with Groq’s innovative tech.

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Notable Quotes & Memorable Moments

• Jonathan Ross (on user experience):
  “You don't ask a question, wait 10 minutes later, and come back. You'd rather get the answer in under a minute.” ([01:32])

• Rob Thomas (on AI’s economic impact):
  “The number one question I get from clients now is how are you doing that at IBM and can you help us do that? And we think the combination of IBM and GROK can make this a reality for any company.” ([03:40])

• Jonathan Ross (summarizing their synergy with IBM):
  "This is a peanut butter and jelly sort of relationship...We already have the bottoms up...Now, going to those deep relationships from IBM...you put those two together and that's an amazing go to market motion." ([07:51])

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Timestamps for Key Segments

• [01:10] — Jonathan Ross explains the strategic value of the partnership and the analogy to broadband.
• [02:13] — Rob Thomas details the revenue-sharing structure and economic impact.
• [03:11] — Discussing direct business impact and adoption (call centers, supply chains, productivity).
• [04:06] — Jonathan Ross describes the technical integration ("it will simply work").
• [04:52] — Rob Thomas discusses sources of demand and shift to multimodal AI.
• [05:43] — Jonathan Ross on global AI hardware supply constraints.
• [06:48] — Rob Thomas on partnership openness and the AI ecosystem.
• [07:50] — Jonathan Ross on dual go-to-market approach and comparing Groq to OpenAI developer reach.

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Summary Table

| Topic | Speaker(s) | Timestamp | Key Insight/Quote | |------------------------------------------|---------------|------------|----------------------------------------------| | Strategic Partnership & Go-to-Market | Ross, Thomas | 01:10–02:00| "You could think of it like broadband..." | | Economics of the Deal | Rob Thomas | 02:13–02:56| "5x performance at 20% of cost..." | | Client Impact & Adoption | Rob Thomas | 03:11–03:55| "Changes how your call center operates..." | | Technical Integration | Jonathan Ross | 04:06–04:37| "It'll be invisible to most users..." | | Demand, Supply, Scalability | Jonathan Ross | 05:43–06:34| "The entire world is supply constrained..." | | Open Partnerships | Rob Thomas | 06:48–07:28| "We are open to working with anybody..." | | Dual Go-to-Market Synergy | Jonathan Ross | 07:50–08:33| "Peanut butter and jelly..." |

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In summary:
IBM and Groq’s partnership aims to redefine the speed and cost efficiency of enterprise AI workloads, blending Groq’s technical advantages with IBM’s enterprise relationships. Early results show strong adoption in financial services, with both companies stressing seamless integration, supply realities, and long-term, open-ended industry collaboration. The podcast offers a succinct but substantive look into the future of enterprise AI infrastructure.

Transcript

[Indiana University Narrator]

Indiana University is shaping the future of healthcare. Advancing discoveries that become treatments for Alzheimer's, obesity, cancer and rare diseases. And training the providers trusted to deliver them from the lab to the clinic. IU powers medical breakthroughs and the talent behind them. See how IU solves what's next iu Edu Impact.

[Jonathan Ross]

Bloomberg Audio Studios Podcasts Radio.

[Interviewer]

News IBM and Grok are announcing a strategic partnership to give clients ultra high speed, low latency AI capabilities via Grox inference technology. For more on how this partnership is going to provide greater access to the full potential of enterprise I, we're joined by Rob Thomas, Senior Vice President of Software and Chief Commercial Officer at IBM and Jonathan Ross, CEO and Founder of grok. And Jonathan, I want to start with you. You know, the way that I look at this is it's a very interesting go to market channel for you, a SAL channel. Think about all of the clients that IBM has and how you've tried to grow the company. Explain how people will access LPU's through this or through the cloud matrix.

[Jonathan Ross]

Absolutely. It's an extraordinary opportunity for both of us. IBM is going to have their sellers sell Grok sku and so now you'll be able to directly access our speed. The advantages that we offer, you could think of it a little bit like offering broadband in the era where dial up wasn't fully rolled out and people were still trying to connect to the Internet. Our LPU's are just significantly faster, but we also keep the cost down. Just imagine if you were to offer broadband and you charged more per bit of data that was sent over the line. It would be uneconomical. Broadband increases the demand. With agentic use cases, it's particularly important to reduce the speed. You don't ask a question, wait 10 minutes later and come back. You'd rather get the answer in under a minute.

[Interviewer]

Rob, under this arrangement with Jonathan, does IBM make any sort of financial investment into Grok or is there some kind of sales or revenue split? Explain the economics of this deal for you guys.

[Rob Thomas]

Big picture is we have a lot of momentum in AI with Watson X. As we said on our earnings last quarter, seven and a half billion dollars as a book of business. And we're trying to solve the client problem of how do they deploy AI faster. So this partnership is all about what Jonathan said, which is 5x performance at 20% of cost. We've seen it with Watson X running on Grok. And so we will be distributing Grok as part of our go to market and there's a revenue share as Part of that we are really excited because we've seen clients already getting an impact to how they're deploying AI because of the integration of our technology together.

[Interviewer]

Let's talk about that, Rob, a little bit more because you're the man who's in charge of the software business. You're also really responsible for the world revenue and profitability of your company. So help us understand why GROK was the obvious choice. How is it helping your clients get answers faster on the inference side of things?

[Rob Thomas]

We looked at every possibility in the market and the clients are looking for significant performance. So some of that changes how your call center operates or how your supply chain runs. And then you combine that with a fraction of the cost, suddenly the economics make sense. It does have a cost problem. And we think this breaks through that. In IBM, we've said we're going to drive four and a half billion of productivity by the end of this year. That' another example of AI truly having an impact. And the number one question I get from clients now is how are you doing that at IBM and can you help us do that? And we think the combination of IBM and GROK can make this a reality for any company.

[Interviewer]

Let's dig into that a little bit now with you, Jonathan, because the integration with what's next orchestrate, what does that look like on your side? How does that happen and happen seamlessly?

[Jonathan Ross]

So the Watson X API is available for anyone to use today. It'll be invisible to most users. It'll simply work. We have a compatible API and this is something we've been working on. We will also work on some lower level integrations with Vllm, which is a technology that IBM is very deeply involved in. But it should just be transparent. You should just get more speed. Just imagine one day you come home, you had dial up and now you have broadband and it costs less.

[Interviewer]

Rob, where's the demand coming from on your side, like IBM, Granite or some other agent tech workload that they want to run using the Grok LPs. Are these public sector names? Are they private sector SMEs? I'm trying to understand who you're serving.

[Rob Thomas]

With it, as often happens, I would say financial services have been early adopters. But the thing that has changed in the market in the last six months is everything is moving to multimodal. We have IBM models that we open source, which are the Granite models. We announced a partnership with Anthropic, we have a partnership with Mistral and Llama, just to name a few. What is incredible about what Jonathan and team have built is any model can run and get instant improvement running on the LPU's from Grox. So I think this is a combination of a multimodal world accelerating inference. With grok, I think this is a great combination.

[Interviewer]

Jonathan, does this capacity already exist or are you supply constrained still? You've got to go out and build it either in Saudi, Finland, here in the States.

[Jonathan Ross]

So the entire world is supply constrained and I would actually expect that to continue for at least the next five to 10 years. When it comes to AI, our advantage is that we have a supply chain that actually ramps much faster. So customers will be able to come to IBM, put in an order and we will be able to fulfill that faster than you would be able to with other technologies. But the supply constraints are real and this is another reason to start working with IBM sooner. The sooner you get access to that capacity, the sooner you're going to have it. I can't tell you how many startups come to us and other companies come to us and they are looking for capacity because some of them are actually growing 10, 20 or even 30% per week or per month, which is an astronomical growth rate. But by approaching us early, we can build to your needs.

[Interviewer]

You were just mentioning, Rob, about all the partnerships you have when it comes to alarms and the offerings that you're intertwining within yours. Will you go to others to ensure that inference is as fast as possible or is it this exclusive?

[Rob Thomas]

With grok, we are open to working with anybody in the ecosystem of AI around what we're doing specifically on the acceleration with grok, we want to lean into this partnership. That's why this is is the one that we've announced today because we have confidence working together with grok. As Jonathan mentioned, we're also enabling some of the lower level technologies in open source like vllm. So this is the right place to be when it comes to inference. But when you think broadly about what's happening in AI, we have many companies working with us on agents. Last week we announced S and P Global is now running on Watson X Orchestrate as an example. So we're always open to new partnerships.

[Interviewer]

And let's just talk about Jonathan, the go to market strategy here of teaming with the age old juggernaut that is IBM, that has so many deep relationships across global enterprises. But is that how you're going to work this going forward? Is teaming up with companies that have those legacy relationships or do you still go out there and win the business yourself?

[Jonathan Ross]

So I would say this is a peanut butter and jelly sort of relationship in the sense that oftentimes when we meet with C level executives, those C level executives turn to their tech teams and ask them to evaluate Grok. And I've been in meetings where the CTO did that and the response from the person is, I already use Grok. It's my default for everything. So we already have the bottoms up. We have 2.3 million developers already building on us. For comparison, OpenAI has 4 million now going those deep relationships from IBM and the fact that IBM is a trusted partner who's been delivering for decades, you put those two together and that's an amazing go to market motion.

[Interviewer]

Well, it's been great having you both on to talk about the go to market strategy. Jonathan Ross, CEO, Grok, of course. Rob Thomas of Senior Vice President of Software over at IBM. We thank you both very much indeed.

[Indiana University Narrator]

Indiana University is shaping the future of health care. Advancing discoveries that become treatments for Alzheimer's, obesity, cancer and other rare and complex diseases. And training the next generation of providers, doctors and nurses trusted to address health challenges with skill, compassion and purpose. From the lab to the clinic, from research teams to patient care, IU talent is driving medical innovation, improving health outcomes and strengthening communities. See how IU solves what's next iu Edu Impact.

[Jonathan Ross]

In our new podcast, Everybody's Business, we talk about the business news that concerns everybody.

[Stacey Vanek Smith]

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[Jonathan Ross]

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