Former Groq engineers Joshua Rubin and Benjamin Serebrin filed a lawsuit on October 2, 2026, alleging that Nvidia's $20 billion licensing deal with Groq in 2025 squeezed out stockholders at a lowball price. The lawsuit claims Groq's board bypassed a required shareholder vote to transfer key technology and 150 to 200 engineers to Nvidia. While Groq defends the deal as delivering exceptional value, critics and U.S. lawmakers scrutinize such 'acquihires' as a means to evade antitrust regulations.
Details of the Nvidia-Groq licensing deal
- ▪Under the 2025 Nvidia-Groq licensing agreement, Nvidia allocated $17 billion to the license and $3 billion in restricted stock units for Groq employees who transferred to Nvidia
- ▪Approximately 150 to 200 Groq engineers, including Groq founder Jonathan Ross and president Sunny Madra, joined Nvidia as part of Nvidia's 2025 licensing transaction with Groq
- ▪Because Nvidia did not acquire Groq in full, Nvidia's $17 billion licensing payment was treated as taxable income for Groq
- ▪In December, Groq announced a $20 billion licensing agreement with Nvidia for Groq's AI inference technology, which was framed as a non-exclusive arrangement allowing Groq to remain independent
Regulatory scrutiny of acquihires
- ▪U.S. Senators Elizabeth Warren, Richard Blumenthal, and Ron Wyden criticized 'acquihires' in 2026, stating they appear designed to evade antitrust scrutiny and consolidate the Big Tech industry
- ▪Silicon Valley companies, including Meta, Microsoft, and Google, have used acquihire arrangements to gain an edge in artificial intelligence without the risk of competition regulators blocking full acquisitions
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