Groq investors sue over $20 billion Nvidia reverse acqui-hire

Two former investors in Groq Inc. have filed a lawsuit in Delaware Chancery Court against the AI chip company’s directors and a former officer. The complaint alleges that the defendants improperly transferred Groq’s technology to Nvidia as part of a $20 billion "reverse acqui-hire." This legal action claims that the deal was not in the best interests of Groq’s shareholders.

The lawsuit follows a controversial transaction where Groq’s technology was handed over to Nvidia, with Groq’s former employees joining the tech giant. The investors argue that this arrangement undermined Groq’s value and benefited Nvidia disproportionately. The case highlights concerns over how such deals are structured and whether they adequately protect minority shareholders.

The lawsuit seeks to hold the defendants accountable for what the plaintiffs describe as a breach of fiduciary duty. The case could set a precedent for how similar "reverse acqui-hire" deals are evaluated in the future, particularly in the competitive AI chip market.