Former Groq Engineers Sue Over Nvidia's $20 Billion Deal
Two former Groq engineers have filed a lawsuit against the AI chip startup's board of directors, claiming that its $20 billion deal with Nvidia unfairly shortchanged stockholders. The lawsuit, filed in Delaware's Court of Chancery on October 2, alleges that the board bypassed a required stockholder vote and failed to ensure the highest possible value for Groq's assets. The plaintiffs, Joshua Rubin and Benjamin Serebrin, argue that conflicts of interest among board members led to decisions that left stockholders billions of dollars worse off.
The lawsuit contends that Nvidia allocated $17 billion for a non-exclusive license and $3 billion in restricted stock units for Groq engineers who joined the company. The plaintiffs also allege that investment funds with board representation stood to gain disproportionately from the deal. Groq has defended the transaction, stating that it delivered exceptional value for the company, its investors, and employees. The startup has raised roughly $1 billion in new funding since June, with Nvidia participating in the round.
Nvidia's Groq 3 LPX inference chip, developed using the acquired technology, has entered full production. The chip is designed to accelerate the decode phase of AI inference and is integrated into Nvidia's Vera Rubin platform. Despite the lawsuit, Groq maintains that it remains an independent company.