Key points
- Justice Department asks if Nvidia's Hugging Face deal could hurt AI rivals
- Nvidia's Groq, Run:ai, and SchedMD deals have also drawn DOJ questions
- Nvidia still expects the Hugging Face deal to close in the first half of 2027
The Justice Department has asked how Nvidia's (NVDA) $12.9 billion deal to buy Hugging Face would affect competition in artificial intelligence, Reuters reported on Wednesday. Officials have asked whether owning Hugging Face, which runs a platform for sharing and deploying open-source AI models, would let Nvidia capture a fundamental distribution point for AI.
The questions come as antitrust enforcers pursue a years-long investigation into Nvidia's conduct that began under President Joe Biden and has continued under President Donald Trump. The department's recent questioning covers Nvidia's acquisitions, investments, and sales practices, and whether the company has pressured its customers. CNBC confirmed the inquiry later in the day. Neither report says whether the Hugging Face questions belong to a formal merger review or to the conduct investigation.
A government investigation is not evidence of wrongdoing, and the inquiry may not lead to any action. Nvidia declined to comment, and Hugging Face did not respond to a request for comment.
Officials want to know how Nvidia could use Hugging Face
The Justice Department's questions about Hugging Face include how Nvidia might use the platform to harm rivals in AI, and whether owning it would give Nvidia leverage. Officials are also asking about Hugging Face's competitors.
Nvidia has already made a commitment on that point. In its 8-K for the deal, Nvidia said it would keep Hugging Face's platform open, consistent with Hugging Face's existing practices. Under that commitment, Hugging Face would keep letting model makers, developers, and users upload and download the models and datasets they choose, and would keep supporting other chip vendors.
The DOJ has also looked at Groq, Run:ai, and SchedMD
The broader probe reaches back to deals Nvidia has already closed. Investigators have examined Nvidia's December 2025 acquisition of SchedMD, whose open-source software helps run supercomputers, and its purchase of Run:ai, which makes software that helps AI chips run more efficiently.
They have also scrutinized Nvidia's conduct after its 2025 deal to license technology from chip startup Groq and hire its engineers. Officials have explored whether Nvidia offered customers larger allocations of AI chips if they also bought its networking equipment and Groq processors, raising questions about whether Nvidia used its dominant product to push into a newer market.
A Justice Department spokesperson declined to comment on any matter before the department, citing longstanding policy, and added, "This DOJ under President Trump's leadership will continue to prioritize advancement of Super Intelligence for the betterment of the American people." The spokesperson also said, "It would be inappropriate for the Department to conduct a merger investigation under the guise of a conduct investigation."
The deal still has months to go
Nvidia agreed to buy Hugging Face on September 2. About $11.9 billion goes to Hugging Face stockholders, and up to about $1 billion more is an equity retention program for employees joining Nvidia, according to the filing. Nvidia expects the deal to close in the first half of 2027, subject to closing conditions that include required regulatory approvals.
Nvidia shares closed down 1.2% at $215.38 on Wednesday.
