Former Groq Engineers Sue Over Nvidia Asset Deal

Former Groq engineers Joshua Rubin and Benjamin Serebrin filed a lawsuit on October 2 in the Court of Chancery of the State of Delaware, alleging that a $20 billion deal between Nvidia and Groq shortchanged stockholders. The plaintiffs claim Groq's board of directors failed to maximize company value and bypassed a required stockholder vote, effectively selling the company at a lowball price.

The agreement reportedly allocated $17 billion for a non-exclusive license of Groq's intellectual property and $3 billion in restricted stock units for employees transitioning to Nvidia. While Nvidia CEO Jensen Huang stated the agreement was for licensing IP and not an acquisition of the company, the lawsuit alleges a conflicted board caused stockholders to lose billions of dollars.

Groq has dismissed the lawsuit as meritless, maintaining that the agreement delivered exceptional value for its investors and employees.