Former Groq engineers sue former board over Nvidia's $20 billion license-and-hire deal

Two former Groq engineers and shareholders, Benjamin Serebrin and Joshua Rubin (Bloomberg Law spells the surname Robin), filed a proposed class action in Delaware's Court of Chancery. CNBC reported the filing date as Oct. 2, 2026, while Bloomberg Law says the complaint was originally filed under seal on Sept. 29. The case, Serebrin v. Ross (No. 2026-1291), was unsealed on Oct. 5. It challenges a December 2025 arrangement in which Nvidia took a non-exclusive license to Groq's technology and hired much of its team. Nvidia is not a named defendant.

The suit comes while the Justice Department is reportedly examining whether that structure was designed to avoid antitrust review. Those reports date to September 2026, and the department has not confirmed them in the coverage reviewed. As of Oct. 6, 2026, the latest coverage reviewed, no court had ruled on the claims.

How the license-and-hire structure was built

Nvidia described the Groq arrangement as a nonexclusive licensing agreement. Groq founder Jonathan Ross, Sunny Madra (listed as chief operating officer by Techzine and as president by Asia Business Daily) and other key team members joined Nvidia, while Groq remained a formally independent company, according to a Sept. 10, 2026 Techzine report that cites Bloomberg.

The deal is reported at about $20 billion. Asia Business Daily's Oct. 6, 2026 report, citing CNBC, says the complaint allocates $17 billion to a non-exclusive license fee for Groq's AI inference technology and $3 billion to restricted stock units for employees who moved. Bloomberg Law's Oct. 5, 2026 article reports the $20 billion figure but does not confirm the split. Other coverage reviewed gives the $20 billion total without the split, so the split should be treated as the complaint's allegation.

Asia Business Daily reports that approximately 150 to 200 engineers, including Ross and Madra, moved to Nvidia. The plaintiffs argue that, given these departures, the transaction was essentially no different from a company sale.

What the Delaware complaint alleges, and Groq's response

The plaintiffs argue that Groq's board effectively sold the company without the stockholder vote Delaware law requires, and, they say, took no proper steps to verify whether a higher price could have been achieved. The case turns on whether a license plus a hired team amounts to a sale of the company.

Bloomberg Law reports that the complaint alleges breaches of fiduciary duty. It says the board allegedly took benefits for itself, senior management and affiliated funds that other stockholders did not share, and cashed out public investors at a price the board set. The plaintiffs are represented by Bernstein Litowitz Berger & Grossmann LLP, according to the same report.

Groq's spokesperson told Bloomberg Law that the transaction delivered exceptional value to the company, its investors and employees. The spokesperson called the suit meritless and said the company will defend itself vigorously. Asia Business Daily reports the same position as given to CNBC on Oct. 5.

Since the unsealing, the coverage reviewed adds the complaint's specific allegations about staff moves and Groq's on-record response. It reports no ruling, hearing date or response from Nvidia to the suit.

The Justice Department review reported in September

By Sept. 10, 2026, the New York Times had reported that the Justice Department was examining whether Nvidia structured the arrangement to avoid antitrust scrutiny. According to a Sept. 10 SDxCentral report, republished by Data Center Dynamics, the department had sent Nvidia a formal request for information, as the Times reported. The inquiry reportedly began after the deal was disclosed in late December 2025.

Techzine's Sept. 10 article, citing Bloomberg, says neither the Justice Department nor Groq gave Bloomberg a substantive response on the probe. It says the transaction was not filed for competition review. It adds that the department could seek civil penalties if it concludes the deal should have been filed in advance, and that it is not certain any action will follow.

The two reports differ on the first outlet to report the review. Data Center Dynamics cites the Times, while Techzine cites Bloomberg.

Nvidia spokesperson John Rizzo told the Times that the Groq story is a prime example of the American system 'working as designed.' Separately, FTC Chairman Andrew Ferguson told Bloomberg in February that the agency wants to ensure such deals 'are not an attempt to get around' its merger review, according to Data Center Dynamics. That report gives no day for the February remark.

What the suit and the probe address, and what comes next

The two matters ask different questions. The lawsuit asks whether Groq's board owed shareholders a vote and a sale process under Delaware law. The reported DOJ review asks whether the deal should have been filed for competition review in advance.

Nvidia CEO Jensen Huang told employees in an email at the time of the deal that the company was 'hiring talent and licensing Groq's IP, not acquiring Groq itself,' according to Asia Business Daily. The complaint does not name Nvidia as a defendant, and its claims are allegations that no court has tested.

The reporting shows the same structure now facing a shareholder suit and a reported federal antitrust review at once. The sources do not establish whether either matter will change how such deals are built. Next steps are not scheduled in the coverage reviewed. The Chancery case has no reported ruling, and the Justice Department has not said whether it will act.