Nvidia paid $14.4 billion for Groq's engineers, and engineers who left are suing over the price

The filing prices the team at six times the technology

Nvidia's▼−0.47% — Nvidia, down 0.47 percent today annual report↗ breaks the GroqPVT$3.5B — Groq, private, latest valuation $3.5B deal into parts, and the parts are the argument. The license is booked at $16.9 billion: $14.4 billion of goodwill "primarily attributable to the workforce and future development of the licensed technology," and $2.5 billion for the technology itself ¹.

No customer contracts, products or equity interests were purchased; $13.0 billion left at closing and $4 billion follows within a year ¹. Goodwill is about 85 percent of the total, 5.8 times the chip design it wraps ¹. Nvidia paid nearly six times as much for the people as for the chips, and former engineers who kept their shares are suing over that price.

A class action over the price of the people

Joshua Rubin and Benjamin Serebrin, engineers who left Groq before the deal was announced but held their stock, filed a proposed class action↗ on October 2, unsealed October 5 in Delaware's Court of Chancery ². They allege the board "sold the company to Nvidia without the stockholder vote Delaware law requires": $17 billion for a license Nvidia labeled non-exclusive, plus $3 billion of Nvidia restricted stock for the roughly 150 to 200 engineers who moved ².

The suit argues the $17 billion payment was taxable income at Groq, that the post-deal Series A priced what remained above what bought-out shareholders received, and that four board funds, BlackRock, Social Capital, Infinitum and Disruptive, engineered the gap ¹. None is a defendant ¹.

The totals below are not the same measure: the $20 billion counts a license fee paid to the company, the $3.5 billion prices only the shares that stayed, and the suit says that per-share mark came in above what bought-out holders received ¹.

Meritless, says the seller

Groq calls the suit "meritless" and says the license "delivered exceptional value for Groq, our investors, and our employees" ². Jensen Huang told employees "we are not acquiring Groq as a company" ². The plaintiffs concede that "no Delaware decision has directly answered the question this case raises" ¹.

Two reviews, one template

The Justice Department opened its inquiry after the December announcement and has sent Nvidia a formal request for information↗; fines are possible, a forced unwind unlikely ³. FTC Chair Andrew Ferguson said in January the agency is "beginning to examine these acqui-hires↗ to make sure they are not an attempt to get around" its merger review ⁴. Nvidia paid Poolside $6 billion for a license and hired 109 staff ³.

Hugging Face is the same split of price plus equity for employees who join, but an outright purchase awaiting approval rather than a license ¹: $11.9 billion to stockholders and up to $1 billion of retention equity↗, closing expected in the first half of 2027 ⁵. Disruptive, accused and not sued, has $7.5 billion committed toward a $10 billion fund↗; its founder Alex Davis chairs the Groq that remains ⁶⁷.

A $14.4 billion goodwill line now waits on two dockets

For Nvidia holders the tail is specific: if either docket lands against the deal, a $14.4 billion goodwill line meets an impairment test, and a possible fine sits on a structure that already moved $17 billion ¹³. The cash is out the door. What stays is a workforce whose value two dockets now help set.