Groq Investors Sue Over $20 Billion Nvidia Reverse Acqui-Hire

Two former Groq Inc. investors have filed a lawsuit in Delaware Chancery Court against the company's directors and a former officer. The complaint alleges that they improperly transferred Groq's AI chip technology and engineering workforce to Nvidia Corp. through a $20 billion reverse acqui-hire deal. The plaintiffs claim the transaction occurred without a stockholder vote or a process designed to secure the best price for shareholders.

The lawsuit targets the structure of the deal, which the plaintiffs describe as a reverse acqui-hire. This typically involves a smaller company selling its assets and talent to a larger firm in exchange for stock or other benefits. The plaintiffs argue that the transaction undervalued Groq's assets and did not adequately compensate existing shareholders.

The case highlights growing scrutiny over corporate deal-making in the tech sector, particularly involving AI and semiconductor companies. It also raises questions about the responsibilities of corporate directors in ensuring fair value for shareholders in such transactions.