Groq Ex-Engineers Sue Board Over $17 Billion NVIDIA (NVDA) Licensing Deal

Delaware Class Action Unsealed

A proposed class action challenging the roughly $20 billion transaction between NVIDIA (NVDA) and AI chipmaker Groq was unsealed in the Delaware Court of Chancery on Monday, October 5. The complaint, Serebrin v. Ross, Del. Ch., No. 2026-1291, was filed under seal on Tuesday, September 29, and it targets Groq's board of directors rather than NVIDIA itself. Its plaintiffs, Benjamin Serebrin and Joshua Rubin, are former Groq engineers who still held shares in the company after the deal was struck.

The filing alleges the board handed Groq's most significant technology and engineering talent to NVIDIA while leaving the remaining business weakened, all without the shareholder vote Delaware law requires and without any process to test or maximize value. It lays out a two-part structure: a $17 billion fee booked as income from a non-exclusive inference-technology licensing agreement announced on December 24, 2025, plus a $3 billion pool of NVIDIA restricted stock units reserved for engineers who moved across with the technology. Founder Jonathan Ross and President Sunny Madra joined NVIDIA under that arrangement, while Simon Edwards took over as CEO of the remaining company, which continues to run the GroqCloud inference service.

The complaint further states NVIDIA has hired virtually all of Groq's engineers, likely around 200 people, and that classifying the $17 billion as licensing income created a related tax burden for Groq. A later funding round valued the shrunken company at approximately $3.5 billion, a figure the plaintiffs present as evidence that shareholders who stayed behind were compensated inadequately.

Groq Calls the Suit Baseless

Groq pushed back on the allegations, describing the litigation as “without merit” and saying it will defend the case actively. A company spokesperson added that the licensing agreement with NVIDIA delivered exceptional value to Groq, its investors and its employees. CNBC, which obtained the complaint and internal correspondence, reports that the plaintiffs claim funds responsible for appointing Groq's directors profited in the subsequent squeeze-out, and that the board majority's conflicted decisions cost Groq shareholders billions of dollars. Rubin and Serebrin left Groq before the transaction was announced, according to their LinkedIn profiles, but both retained equity.

In a memo to employees circulated around the announcement, NVIDIA CEO Jensen Huang wrote that the company plans to fold Groq's low-latency processors into its AI factory architecture and extend the platform to broader inference and real-time workloads, while stressing that “we are not acquiring Groq the company.” Groq has said it raised roughly $1 billion since June from investors including NVIDIA. The regulatory file on the deal was already open before the suit: the Justice Department began an antitrust investigation weeks after the December announcement and sent NVIDIA a formal demand for information, and the FTC and DOJ launched a joint public inquiry on February 23 into updated guidance for collaborations among competitors, covering licensing agreements.

$241 Resistance Caps NVDA

COINOTAG data shows NVIDIA (NVDA) trading at $239.51, up 1.46% over the past 24 hours, inside a session range of $235.07 to $240.49. The strongest resistance sits at $241.22, which COINOTAG's composite scoring rates 84/100 on the convergence of the R1 pivot and the Fibonacci 0.000 level; support at $234.84 scores 65/100, anchored by the Fibonacci 0.114 retracement and the prior daily low. Momentum is stretched: the daily RSI prints 71.2, the MACD signal is bullish and the trend filter reads an uptrend, while perpetual funding of 0.0136% and roughly $225.7 million in open interest point to modest leveraged demand. A daily close above $241.22 would extend the move the market has priced in; losing $234.84 would flag it as failed.