Groq engineers sue board over $20 billion Nvidia deal

Two former Groq engineers and shareholders, Benjamin Serebrin and Joshua Rubin, have filed a lawsuit in Delaware challenging a $20 billion deal between AI chip startup Groq and Nvidia. The plaintiffs allege that the board breached its fiduciary duty by improperly structuring the transaction, which favored insiders and employees over common stockholders.

The deal, closed in December 2025, was structured as a non-exclusive technology licensing arrangement rather than a traditional acquisition. Of the approximately $20 billion total, roughly $17 billion was paid in cash as licensing fees, while a $3 billion Nvidia stock pool was established for approximately 200 engineers who transitioned to Nvidia. This talent transfer included Groq’s founder and CEO Jonathan Ross and president Sunny Madra.

The lawsuit contends that the arrangement allowed top employees to receive preferential treatment and separate compensation for moving to Nvidia, effectively undervaluing common shares. While Groq continues to operate as an independent company under new CEO Simon Edwards, the litigation focuses on how the proceeds of the licensing and hiring agreement were distributed among stakeholders.