Groq faces lawsuit over $20 billion NVIDIA transaction

On October 6, 2026, Groq was sued in the U.S. Delaware Chancery Court, accused of sacrificing minority shareholders' rights in a non-exclusive licensing deal with NVIDIA valued at $20 billion. The plaintiffs, Joshua Rubin and Benjamin Serebrin, former employees of Groq who still hold shares in the company, allege that the Groq board failed to act in the best interests of all shareholders.

According to the lawsuit documents, the $20 billion deal with NVIDIA is structured in two parts: $17 billion is to be shared among all shareholders, while $3 billion is allocated in restricted shares to Groq employees who transitioned to NVIDIA. The plaintiffs argue that this arrangement creates a serious conflict of interest for Groq's board, which neglected its legal duty to secure the best price and structure for all shareholders.

The lawsuit claims that some shareholders were forced to cash out at a "low price" without accounting for Groq's future growth potential and synergies with NVIDIA. Furthermore, since this transaction is not a genuine acquisition, the $17 billion licensing fee is considered taxable income for Groq. This information was reported by ITHome, citing CNBC and the Financial Times.