Former Groq engineers sue board over Nvidia licensing deal

Former Groq engineers and shareholders Benjamin Serebrin and Joshua Rubin have sued Groq's board in Delaware's corporate court over the company's deal with Nvidia, the Financial Times reported on 5 October 2026. The suit was filed on Friday.

The Financial Times said the complaint alleges the board breached its fiduciary duty. It claims the board sold Groq's core assets and top staff and left a hollowed-out shell, according to the Financial Times report via Techmeme.

The deal was announced on 24 December 2025 as a non-exclusive licence of Groq's inference technology to Nvidia. It was reported at about $20 billion: roughly $17 billion in cash licence fees and about $3 billion in Nvidia stock. The stock went to around 200 Groq engineers who moved to Nvidia, including founder Jonathan Ross and President Sunny Madra.

The plaintiffs allege common stockholders were undervalued and cashed out cheaply while insiders were favoured. They also allege the payout ignored upside and synergies, the licence fee was taxed as income, some holders were denied a vote, and the board was conflicted. The suit points to four "conflicted funds": BlackRock, Social Capital, Infinitum and Disruptive. They are not named as defendants.

The plaintiffs concede that "No Delaware decision has directly answered the question" of treating an acqui-hire as a merger, according to Crypto Briefing. The claims are allegations, not court findings. Deal figures also vary by outlet: Dealroom puts the licence at $11 billion and the total at $14.7 billion.

Nvidia declined to comment. Groq did not immediately respond.

After the deal, Groq stayed independent under CEO Simon Edwards, who runs GroqCloud. The business was later valued at $3.5 billion in a funding round that Nvidia joined. Nvidia unveiled its first Groq-based chip in March, and it reached full production in August.

Senators Warren, Blumenthal and Wyden have criticised acqui-hires. The New York Times reported a Department of Justice probe in September, and FTC Chair Andrew Ferguson is reviewing such deals. The notes give no date for a court response or hearing in the Delaware case.