Former Groq engineers Benjamin Serebrin and Joshua Rubin filed a lawsuit in Delaware against the board of the AI chip startup. The plaintiffs allege that the board improperly structured a licensing deal with Nvidia, which was valued at approximately $20 billion and closed in December 2025.
The lawsuit claims that common stockholders were undervalued, while insiders received preferential treatment. The transaction consisted of $17 billion in cash licensing fees and a $3 billion Nvidia stock pool allocated for about 200 engineers who transitioned to Nvidia.
Groq continues to operate as an independent entity under CEO Simon Edwards. The plaintiffs argue that the board failed its fiduciary duty by favoring insiders over common shareholders through the licensing structure rather than a traditional acquisition.
The deal is also under scrutiny by the US Department of Justice, which launched an antitrust investigation in September 2026. Federal regulators are examining whether the arrangement bypassed mandatory premerger notification requirements under the Hart-Scott-Rodino law.
