Former Groq stockholders sue its old board, saying Nvidia's $20 billion deal skipped a required vote

Two former Groq engineers who still held stock, Benjamin Serebrin and Joshua Rubin, are suing Groq's former board and CEO in Delaware's Court of Chancery over Nvidia's roughly $20 billion deal for the chip startup's technology and staff. The proposed class action, unsealed Monday, Oct. 5, 2026, says the board sold the company to Nvidia without the stockholder vote Delaware law requires and at a "lowball" price. Groq says the suit is meritless. Nvidia is not a defendant.

Big Tech has gotten into the habit of buying AI startups without technically buying them. It licenses the technology, hires the founders and most of the team, and leaves a smaller company behind, which skips the usual merger review and the usual shareholder vote. This is one of the first lawsuits to test that playbook in Delaware, the court that governs most US companies. If the judge agrees that a $20 billion "license" was really a sale, every future deal built this way gets harder and more expensive, and the people left behind at these startups get a real claim to the money. For now these are just allegations, and Groq says it will fight them.

On Monday, 5 October 2026, a proposed class action over Nvidia’s deal with the chip startup Groq was unsealed in Delaware’s Court of Chancery, the state’s business court. The case is Serebrin v. Ross, No. 2026-1291. A class action is one lawsuit brought for a group of stockholders, not only the people named at the top. Proposed means a judge has not yet agreed that those two people can speak for everyone else who held the stock. Bloomberg Law reports the complaint was first filed under seal on 29 September, so the public could not read it, and was unsealed on Monday. CNBC reports the documents were filed on Friday, 2 October. The Financial Times describes a complaint filed that Friday in a Delaware corporate law court. The Monday date is when Bloomberg Law says the complaint became public.

The plaintiffs are Benjamin Serebrin and Joshua Rubin. CNBC reports they are former Groq engineers who left the company before the Nvidia deal was announced and who still held Groq stock. Bloomberg Law reports they are represented by the law firm Bernstein Litowitz Berger & Grossmann.

The defendants are Groq’s former board and its chief executive. The case is captioned Serebrin v. Ross, and the complaint names founder Jonathan Ross. Nvidia is not a defendant, Bloomberg Law reports. The same story says that, as of Monday, Groq and its board had not yet appeared in court.

What the complaint alleges, as CNBC quotes it. The board “sold the company to Nvidia without the stockholder vote Delaware law requires and without any process designed to test or maximize the value of what Nvidia bought.” A stockholder vote is the ballot the owners normally get when a company is sold. The suit says stockholders got a “lowball” price and were “squeezed out,” meaning pushed out for less than the complaint says the shares were worth. It says “a Board majority was conflicted,” meaning most of the directors had a personal stake, and that this “conflicted choice” cost stockholders “billions of dollars.” Bloomberg Law quotes the complaint calling the deal “flagrant breaches of fiduciary duty.” A fiduciary duty is the board’s legal job to put the stockholders first. The complaint also says, in the line Bloomberg Law quotes, “New, innovative transactions are still governed by Delaware law.” Those sentences are allegations. A court has not ruled on them.

The split of the money, as the complaint describes it and CNBC reports it. Nvidia allocated $17 billion to a license it labeled “non-exclusive,” set aside about $3 billion in Nvidia restricted stock units for the Groq employees who moved with the technology, and “positioned the investment funds that designated Groq Board members to enjoy windfall returns.” A non-exclusive license is permission to use technology that, on that label, does not stop the owner from licensing it to someone else. A restricted stock unit is company stock an employee receives over time, usually for staying. The complaint says about 150 to 200 Groq engineers became Nvidia employees. Those figures are the complaint’s. They are not a figure Nvidia has published as its own account of the deal.

The agreement the suit is about is from 24 December 2025. Groq’s newsroom post that day said the company had entered a “non-exclusive licensing agreement” with Nvidia for Groq’s inference technology. Inference is the step where an already-trained model answers a request. Training is the earlier job of teaching the model. Groq said founder Jonathan Ross, president Sunny Madra, and other members of the team would join Nvidia to help scale the licensed technology. Groq said it would keep operating as an independent company, with Simon Edwards as chief executive, and that GroqCloud, its cloud service, would continue without interruption. The post did not name a price.

The price in the headlines is from reporting, not from that post. CNBC’s report on 24 December 2025 said Nvidia had agreed to buy assets from Groq for about $20 billion in cash, and called the transaction Nvidia’s largest deal on record. CNBC attributed the cash figure to Alex Davis, chief executive of Disruptive, the firm that led Groq’s financing round that September. The same story said Groq raised $750 million in that round at a valuation of about $6.9 billion. A valuation, here, is the price investors put on the whole company when they put new money in. It is not a number for what the stockholders in this lawsuit say they were paid. CNBC also reported that Nvidia’s chief financial officer declined to comment on the transaction at the time. In an email to employees that CNBC obtained, Nvidia chief executive Jensen Huang wrote: “While we are adding talented employees to our ranks and licensing Groq’s IP, we are not acquiring Groq as a company.” IP is intellectual property, the technology itself.

Groq’s answer, given to CNBC and also reported by Bloomberg Law. A spokesperson said: “Our licensing agreement with NVIDIA delivered exceptional value for Groq, our investors, and our employees.” The next line: “This lawsuit is meritless and we will vigorously defend ourselves against it.” CNBC also quotes the company saying it remains focused on serving customers and on building what it calls the world’s leading AI inference cloud. CNBC reports that Groq has raised about $1 billion since June, including from Nvidia. CNBC said Nvidia had been asked for comment on the lawsuit. That story does not print a reply from Nvidia.

The picture is a case card for Serebrin v. Ross in the Delaware Court of Chancery. It says former Groq stockholders claim Nvidia’s $20 billion Groq deal skipped a required stockholder vote. Three panels give figures from the complaint: a $17 billion license, $3 billion in Nvidia stock units, and the 150 to 200 engineers who moved to Nvidia. The card does not print a calendar date. It is a summary of the case. It is not a photograph of a courtroom, a chip, or a person.

In plain terms, two former Groq engineers who still held stock have sued the company’s old board and chief executive in Delaware. They say a deal labeled a non-exclusive license was really a sale to Nvidia, done without the stockholder vote Delaware law requires, and at a price they call too low. The complaint puts $17 billion on that license and about $3 billion in Nvidia stock for the people who moved, and it says about 150 to 200 engineers became Nvidia employees. Groq says the agreement delivered exceptional value and that the suit is meritless. Nvidia is not a defendant. A judge has not decided the case.