Two former Groq engineers have filed a lawsuit in Delaware alleging that Nvidia's $20bn licensing deal with Groq unfairly enriched senior management and affiliated funds while short-changing common stockholders. The complaint claims the 2025 transaction, framed as a non-exclusive licensing arrangement, effectively stripped Groq of its core assets and top talent, including founder Jonathan Ross, leaving behind a hollowed-out shell. Plaintiffs Benjamin Serebrin and Joshua Rubin argue the Groq board failed in its fiduciary duty by not securing the best price and structure for all shareholders, with some excluded from voting on the deal.
The lawsuit alleges Nvidia hired nearly all of Groq's engineers—estimated at 200 workers—and created a $3bn stock bonus pool for select employees, while common stockholders received a $17bn licensing payment treated as taxable income. The deal was criticized for not accounting for future upside or synergies with Nvidia. Senators Elizabeth Warren, Richard Blumenthal, and Ron Wyden previously condemned similar Big Tech "acqui-hires" for evading antitrust scrutiny.
Groq later pivoted to AI cloud computing after Nvidia participated in a funding round valuing the remaining company at $3.5bn. The plaintiffs claim four conflicted funds—Black Rock, Social Capital, Infinitum, and Disruptive—profited from remaining affiliated with the surviving Groq. Nvidia declined to comment, and Groq did not immediately respond.
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