Former Groq Engineers Sue Over Nvidia Deal Alleging Unfair Practices

Two former Groq engineers have filed a lawsuit against the company over its 2025 deal with Nvidia. Benjamin Serebrin and Joshua Rubin, who held shares in Groq, allege that the board sold the company's core technology and top talent to Nvidia, leaving other shareholders with a diminished business. They claim the board did not pursue the best possible price, had conflicts of interest, and did not allow all shareholders to vote on the deal.

The deal in question, announced on Christmas Eve 2025, was framed by Nvidia as a non-exclusive licensing agreement that allowed Groq to remain independent. However, it brought founder Jonathan Ross and most of the engineering team to Nvidia. The arrangement included a $17 billion license payment and a separate $3 billion pool of Nvidia stock for selected engineers who moved to the company, totaling around 200 people.

Nvidia's annual filing describes the deal as a non-exclusive license to Groq's LPU technology and the hiring of certain employees, with no acquisition of Groq equity, customer contracts, or products. The lawsuit highlights the lack of Delaware precedent directly applying merger rules to such transactions, making this case significant in testing the structures of similar deals in the tech industry.

The plaintiffs acknowledge that Groq's surviving business has since raised $350 million at a $3.5 billion valuation. The case also follows reports that the US Justice Department is examining whether the deal was designed to avoid antitrust review.