DOJ probes Nvidia's $12.93 billion Hugging Face deal, sources say

Summary

• Justice Department is asking how Nvidia's $12.93 billion Hugging Face purchase would affect AI competition, two sources said.
• The questions run alongside a years-long conduct probe begun under Biden and continuing under Trump.
• Any DOJ action could reshape Nvidia's acquisition strategy and ripple across the AI chip industry.

The latest

The US Department of Justice has made inquiries into whether Nvidia's $12.93 billion purchase of open-source platform Hugging Face would harm competition in artificial intelligence, two people familiar with the matter told Reuters. The questions come as antitrust enforcers press a broader investigation into the chip designer's conduct. A DOJ spokesperson declined to comment on matters before the department, citing longstanding policy.

Details

• The deal: Nvidia has said the Hugging Face acquisition is expected to close in the first half of 2027, and that the platform would keep supporting work with a range of chip, cloud and AI providers. Nvidia declined to comment on the DOJ questions, and Hugging Face representatives did not respond to a request for comment.
• The core question: Officials have asked whether the transaction would let Nvidia capture a fundamental distribution point for AI, the two people said. Their questions include how Nvidia might use the platform to harm rivals, whether it could gain leverage from the business, and who Hugging Face's competitors are.
• The wider probe: The department's recent questioning covers Nvidia's acquisitions, investments, sales practices and whether the company has pressured its customers, the sources said. The examination began under former President Joe Biden and has continued under President Donald Trump. Government investigations are not evidence of wrongdoing and do not necessarily result in lawsuits.
• The Groq review: The DOJ has scrutinized Nvidia's 2025 deal to license technology from chip startup Groq and hire its engineers, the people said. Officials explored whether Nvidia offered larger AI chip allocations to customers who bought its networking equipment and Groq processors, raising questions about leveraging a dominant product into a newer market. Groq did not respond to a request for comment.
• Other transactions: Investigators have also examined Nvidia's December 2025 purchase of SchedMD, whose open-source software helps run supercomputers relevant to national security, one source said. The deal sparked concern among AI specialists over continued access; Nvidia has vowed to maintain open access and support. The DOJ separately looked at Nvidia's acquisition of Run:ai.
• The DOJ response: The spokesperson said the department under Trump's leadership will continue to prioritize advancement of what it called super intelligence for the betterment of the American people, adding that "it would be inappropriate for the Department to conduct a merger investigation under the guise of a conduct investigation."
• The political frame: Nvidia CEO Jensen Huang has built a relationship with Trump, appearing with him frequently and joining his diplomatic trip to China. Trump, who has disclosed owning Nvidia stock, awarded Huang the National Medal of Science. Reuters reported there is no indication Trump has any involvement in the probe.
• The competitive field: Nvidia holds the biggest share of the AI chip market powering tools such as ChatGPT and Anthropic's Claude. Broadcom and Alphabet's Google jointly design processors aimed at beating Nvidia hardware on specific tasks, while AMD says it can produce technically superior hardware and has struck billion-dollar deals with AI labs and cloud operators.

Background

Nvidia has become a cornerstone of the AI boom, backing major players including Anthropic and OpenAI and spurring global data center construction to meet computing demand. It has been the world's most valuable company during the period the probe has been open.

Between the lines

The DOJ spokesperson's line about merger investigations under the guise of conduct probes draws a boundary the reporting itself blurs: inquiries into Hugging Face, Groq, SchedMD and Run:ai all sit inside one open conduct examination. Reuters noted that staff-led DOJ investigations often take years and stretch across administrations, which is why a probe opened under Biden is still live under Trump.

What's next

Watch whether the DOJ opens a formal merger review before the Hugging Face deal's expected close in the first half of 2027, and whether enforcement action emerges from the Groq licensing arrangement.

Source: Reuters