Groq engineer-shareholders sue board over $20 billion Nvidia deal

Groq’s board now faces a lawsuit over the deal that sent most of the company to Nvidia. The plaintiffs are two of the people who helped build Groq.

Benjamin Serebrin and Joshua Rubin, both former engineers and shareholders at the AI chip startup, filed suit in Delaware around October 3-4, 2026. They allege the board improperly structured a licensing arrangement with Nvidia valued at approximately $20 billion.

The core complaint is about who got paid, and how much. According to the suit, common stockholders were undervalued while insiders received preferential treatment.

How the Nvidia deal was built

The transaction closed in December 2025. On paper it was a licensing deal, not an acquisition.

Of the roughly $20 billion total, about $17 billion came in cash as licensing fees. Another $3 billion took the form of an Nvidia stock pool. That equity was set aside for around 200 Groq engineers who moved over to Nvidia.

Roughly 90% of Groq’s employees ended up at Nvidia.

Founder and CEO Jonathan Ross joined Nvidia, as did president Sunny Madra.

Groq, technically, is still around. It continues to operate as an independent company under a new CEO, Simon Edwards.

What the plaintiffs are alleging

Serebrin and Rubin’s case rests on fiduciary duty. That is the legal obligation directors have to act in the best interests of the company and its shareholders.

The lawsuit claims Groq’s board failed to meet that obligation. Critics of the arrangement argue its structure favored insiders over people holding common stock.

The distinction matters in startup land. Common stock is typically what employees and founders hold, while investors often hold preferred shares with extra protections.

When a deal is routed through licensing fees and targeted equity grants rather than a traditional buyout, the money can flow in very different directions. The plaintiffs contend that, in this case, it flowed away from them.

None of these allegations have been proven. The case now sits in Delaware, where a large share of corporate disputes end up being decided.

The DOJ is also looking

The shareholder suit is not the only scrutiny the deal faces. In September 2026, the US Department of Justice opened an antitrust investigation into the transaction.

Federal investigators are examining whether the arrangement sidestepped premerger notification requirements under the Hart-Scott-Rodino law. That framework exists so antitrust regulators can review big deals before they close.

Context: a fast rise, then a fast exit

In mid-2025, the company raised $750 million at a $6.9 billion valuation.

Months later, it agreed to the Nvidia deal valued at roughly $20 billion. That is close to three times the valuation from its last funding round.

The lawsuit argues the headline figure obscures how unevenly the proceeds were divided.

What this means for tech dealmaking

The Groq case tests the limits of that model on two fronts at once. The DOJ probe questions whether such deals dodge antitrust review, while the Delaware suit questions whether they shortchange the shareholders left behind.

For Nvidia, the deal brought in a large team of experienced chip engineers along with Groq’s founder and president. The legal fallout lands primarily on Groq’s board, though the DOJ review keeps the transaction itself under federal scrutiny.