Two former Groq engineers are suing the company's old board, claiming it handed Nvidia both the chip design and the team that built it while cutting other shareholders out of the upside.
The proposed class action, filed by Benjamin Serebrin and Joshua Rubin in Delaware's Court of Chancery and unsealed this week, targets Groq's former board and ex-CEO Jonathan Ross. It alleges the board approved a deal worth about $20 billion: a $17 billion license fee for all investors plus a separate $3 billion Nvidia stock pool reserved for the roughly 200 engineers, including Ross, who moved to Nvidia. Nvidia's own filings book $14.4 billion of that license as goodwill tied to the workforce and future development, versus just $2.5 billion for the technology itself. The suit argues Ross and other senior staff got a discount on their shares plus separate Nvidia pay for following the chip to its new owner, while the board denied some shareholders a vote.
No Delaware case has squarely ruled on this kind of license-plus-hire structure, which is exactly why the outcome matters beyond Groq. The Justice Department is already asking Nvidia questions about the arrangement, and regulators have flagged these reverse acqui-hire deals as a possible way around standard merger review. A ruling here would shape how other chip and AI companies structure talent-and-IP deals without technically selling the company.
Groq calls the suit meritless and says it still operates independently, though it's now deploying racks built on the very chip it licensed away, which is one way to describe independence.