--- title: "Nvidia paid $14.4 billion for Groq's engineers, and engineers who left are suing over the price" description: "Nvidia's 10-K books $14.4 billion of the $16.9 billion Groq license as goodwill for the workforce and its future work. Two former engineers who kept their shares are contesting that price in Delaware, and a Justice Department request for information sits on the deal's structure." publisher: "The Inference" section: "Deals" published: 2026-10-10T01:24:31.900Z modified: 2026-10-10T01:24:31.900Z canonical: https://theinference.org/article/nvidia-paid-14-4-billion-for-groq-s-engineers-and-engineers-who-left-are-suing-over-the-price language: en keywords: "Nvidia, Groq, Antitrust, Litigation, Acquisitions" --- # Nvidia paid $14.4 billion for Groq's engineers, and engineers who left are suing over the price > Nvidia's 10-K books $14.4 billion of the $16.9 billion Groq license as goodwill for the workforce and its future work. Two former engineers who kept their shares are contesting that price in Delaware, and a Justice Department request for information sits on the deal's structure. ## The filing prices the team at six times the technology [Nvidia](https://theinference.org/markets/companies/nvidia)'s [annual report](https://www.tomshardware.com/tech-industry/semiconductors/former-groq-engineers-sue-board-over-usd20-billion-nvidia-deal-saying-it-handed-nvidia-the-lpu-and-the-team-that-built-it-plaintiffs-allege-the-board-kept-billions-from-other-shareholders) breaks the [Groq](https://theinference.org/markets/companies/groq) 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. *Chart: **Goodwill for people is 85 percent of the $16.9 billion Groq license** Column chart of the Groq license as booked in Nvidia's annual report: $16.9 billion in total, $14.4 billion of goodwill for the workforce, $2.5 billion for the technology itself.* *The Groq license as booked in Nvidia's annual report, billions of dollars: $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. Source: Tom's Hardware, citing Nvidia's 10-K. [1]* ![Die shot of Groq's first-generation LPU inference chip](https://storage.googleapis.com/theinference-public/img/002c2e72ea1839b6.jpg) *A die shot of Groq's first-generation LPU. Nvidia's accountants priced the licensed technology itself at $2.5 billion, and the workforce and its future work at $14.4 billion. (Avivweinstein)* ## 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](https://www.cnbc.com/2026/10/05/nvidia-groq-deal-stockholder-lawsuit.html) 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]. *Chart: **The deal drew $20 billion; the Groq left behind repriced at $3.5 billion** Three bars comparing reported Groq valuation marks: the reported $20 billion Nvidia deal value, the $6.9 billion September 2025 round, and the $3.5 billion post-deal Series A.* *Reported valuation marks, billions of dollars. Deal value per sources close to the company quoted in coverage of the suit; the September 2025 and post-deal rounds per Groq financing disclosures reported by Tom's Hardware. The Series A followed the license. [1][2]* ## 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](https://theinference.org/markets/people/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](https://thenextweb.com/news/doj-nvidia-groq-licensing-antitrust-review); fines are possible, a forced unwind unlikely [3]. FTC Chair Andrew Ferguson said in January the agency is "[beginning to examine these acqui-hires](https://www.pymnts.com/cpi-posts/ftc-signals-closer-look-at-big-tech-acqui-hires-as-antitrust-concerns-grow/) to make sure they are not an attempt to get around" its merger review [4]. Nvidia [paid Poolside $6 billion for a license](https://theinference.org/article/nvidia-paid-poolside-7-billion-to-not-buy-it) 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](https://financefeeds.com/nvidia-hugging-face-8k-filing-12-9-billion-deal/), closing expected in the first half of 2027 [5]. Disruptive, accused and not sued, has [$7.5 billion committed toward a $10 billion fund](https://www.wsj.com/finance/venture-firm-behind-chip-startup-groq-targets-10-billion-megafund-030ce4a0); its founder Alex Davis chairs the Groq that remains [6][7]. *Chart: **The Groq license is the largest of Nvidia's price-plus-equity deals** Column chart comparing three Nvidia deals: Groq at $17 billion plus $3 billion of restricted stock for engineers, Hugging Face at $11.9 billion plus up to $1 billion of retention equity, and Poolside at $6 billion with no reported equity.* *Headline consideration, billions of dollars. Groq: $17 billion license fee, booked at $16.9 billion, plus $3 billion of Nvidia restricted stock for the roughly 150 to 200 engineers who moved. Hugging Face: $11.9 billion to stockholders plus up to $1 billion of retention equity, an agreed purchase awaiting approval with closing expected in the first half of 2027. Poolside: $6 billion license, 109 staff hired, no equity figure reported. Sources: Tom's Hardware; CNBC; The Next Web; FinanceFeeds. [1][2][3][5]* ## 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 [1][3]. The cash is out the door. What stays is a workforce whose value two dockets now help set. ## Takeaway Nvidia books $14.4 billion of its $16.9 billion Groq license as goodwill for the workforce, and that price now faces a Delaware class action and two antitrust reviews; either docket could force an impairment test on the line. ## Sources 1. [Tom's Hardware, Shane Downing, 'Former Groq engineers sue board over $20 billion Nvidia deal, saying it handed Nvidia the LPU and the team that built it', 7 October 2026](https://www.tomshardware.com/tech-industry/semiconductors/former-groq-engineers-sue-board-over-usd20-billion-nvidia-deal-saying-it-handed-nvidia-the-lpu-and-the-team-that-built-it-plaintiffs-allege-the-board-kept-billions-from-other-shareholders) 2. [CNBC, Kai Nicol-Schwarz, 'Nvidia's $20 billion Groq deal faces lawsuit alleging startup's stockholders were shortchanged', 5 October 2026](https://www.cnbc.com/2026/10/05/nvidia-groq-deal-stockholder-lawsuit.html) 3. [The Next Web, Ana-Maria Stanciuc, 'The Justice Department is investigating whether Nvidia structured its Groq deal to avoid antitrust review', 10 September 2026](https://thenextweb.com/news/doj-nvidia-groq-licensing-antitrust-review) 4. [PYMNTS / Competition Policy International, 'FTC Signals Closer Look at Big Tech Acqui-Hires as Antitrust Concerns Grow', 18 January 2026](https://www.pymnts.com/cpi-posts/ftc-signals-closer-look-at-big-tech-acqui-hires-as-antitrust-concerns-grow/) 5. [FinanceFeeds, Tobi Opeyemi Amure, 'Nvidia Hugging Face Deal: What the 8-K Actually Discloses', 20 September 2026](https://financefeeds.com/nvidia-hugging-face-8k-filing-12-9-billion-deal/) 6. [The Wall Street Journal, Kate Clark, 'Venture Firm Behind Chip Startup Groq Targets $10 Billion Megafund', 7 October 2026](https://www.wsj.com/finance/venture-firm-behind-chip-startup-groq-targets-10-billion-megafund-030ce4a0) 7. [Magica, 'Groq backer Disruptive targets $10B fund, shifting beyond individual deals', 7 October 2026](https://www.magica.com/news/disruptive-ten-billion-fund-late-stage-ai-bets) --- Nvidia paid $14.4 billion for Groq's engineers, and engineers who left are suing over the price — The Inference. Canonical: https://theinference.org/article/nvidia-paid-14-4-billion-for-groq-s-engineers-and-engineers-who-left-are-suing-over-the-price