Two former Groq engineers who own shares in the AI chip startup have sued its board in Delaware, alleging directors shortchanged common stockholders when they structured Groq’s licensing and hiring deal with Nvidia, the Financial Times reported Monday.
The complaint, filed Friday in Delaware’s corporate law court by Benjamin Serebrin and Joshua Rubin, alleges the board improperly moved Groq’s core technology and top engineers to Nvidia while leaving other shareholders tied to a diminished remaining business. The plaintiffs say some investors were not allowed to vote on the transaction and that the board failed in its duty to secure the best available price and structure for all shareholders, according to the FT and reports citing it.
Groq announced the non-exclusive licensing agreement on Dec. 24, 2025, saying founder Jonathan Ross, president Sunny Madra and other team members would join Nvidia while Groq continued as an independent company under new CEO Simon Edwards. The arrangement has been widely valued at about $20 billion. Per the FT’s account, the complaint argues it combined roughly $17 billion in licensing fees with a separate pool of about $3 billion in Nvidia stock for engineers who moved to Nvidia, including Ross, with as many as 200 workers making the move.
The lawsuit alleges common stockholders were bought out too cheaply, while Ross and other senior employees accepted lower prices for their shares and received separate compensation for moving with the technology. The plaintiffs also argue the payout ignored future upside and potential synergies with Nvidia, and they criticize a structure that left the licensing payment taxable at the Groq level rather than as part of a full acquisition, Traders Union reported, citing the FT.
The complaint describes four investors, BlackRock, Social Capital, Infinitum and Disruptive, as conflicted funds that stayed affiliated with the surviving Groq, though they are not named as defendants. Groq raised $350 million at a $3.5 billion valuation in August in a round led by Disruptive, with planned participation from Nvidia, as it shifted toward its inference cloud business.
The plaintiffs acknowledge there is no direct Delaware precedent for subjecting a license-and-hire deal to traditional merger-style review. Nvidia declined to comment and Groq did not immediately respond, the FT reported. None of the allegations have been tested in court.
The private suit is separate from the Justice Department’s reported antitrust inquiry into the same transaction.