Nvidia’s $12.9 Billion Hugging Face Deal Draws Justice Department Questions

The inquiries about the open-source AI platform are running alongside a long-standing Justice Department examination of Nvidia’s business, the people told the news agency. Officials’ recent questions have covered the company’s acquisitions and investments, how it sells its products and whether it has put pressure on customers, according to the report.

Government investigations aren’t evidence of wrongdoing and don’t necessarily lead to lawsuits. Reuters said the probe may not result in any action by the department.

Nvidia declined to comment to Reuters, and Hugging Face didn’t respond to the news agency’s request. A Justice Department spokesperson declined to discuss matters before the department, citing longstanding policy, and said the agency under President Donald Trump would keep prioritizing the “advancement of Super Intelligence” for the benefit of Americans.

Distribution point

Nvidia agreed in early September to buy Hugging Face, a central hub where developers find, test and deploy AI models and datasets. The deal would be the chipmaker’s biggest conventional acquisition, topping its roughly $6.9 billion purchase of networking company Mellanox, which closed in 2020.

The company expects the transaction to be completed in the first half of 2027, Reuters reported. Nvidia has said Hugging Face will keep working with a range of chip, cloud and AI providers, and Chief Executive Officer Jensen Huang said at the announcement that developers won’t need Nvidia hardware to build on or deploy through the platform.

The Justice Department’s questions focus on whether owning Hugging Face would let Nvidia capture a foundational point of distribution for AI, the people told Reuters. Hugging Face had annualized revenue of about $150 million, Reuters previously reported.

Two administrations

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The broader examination of Nvidia began under former President Joe Biden, a Democrat, and has continued under Trump, a Republican, according to Reuters. Over that span Nvidia has become the world’s most valuable company. Reuters said there was no indication Trump has been involved.

Read more: Nvidia Weighs Buying Reflection AI

As part of the probe, officials have looked at Nvidia’s December 2025 purchase of SchedMD, one of the people said. SchedMD makes open-source software used to run supercomputers, including systems with national-security relevance. The deal raised concerns among AI specialists about continued access to the software, and Nvidia has pledged to keep it open and supported, Reuters reported.

The stakes extend well beyond a single deal. Nvidia has invested in leading AI developers including Anthropic and OpenAI and has fueled data center construction worldwide to meet demand for its chips. Any enforcement action could reverberate across the semiconductor industry and test the investment and acquisition strategy that has widened Nvidia’s influence in AI, according to Reuters.

Groq arrangement

The department has also been investigating whether Nvidia structured its $20 billion licensing agreement with AI chip startup Groq Inc. to avoid antitrust review, Bloomberg News reported on Sept. 9, citing people familiar with the confidential inquiry. Under that deal, announced in December, Nvidia obtained rights to Groq’s technology.

Licensing and hiring arrangements generally fall outside the premerger notification rules that the Hart-Scott-Rodino Act applies to large acquisitions. An outright purchase the size of the Hugging Face deal requires a filing, giving the Justice Department and the Federal Trade Commission a formal window to review it before closing.

Nvidia has met US antitrust resistance before. The FTC sued in December 2021 to block the company’s proposed $40 billion takeover of chip designer Arm Ltd., and Nvidia dropped the deal in 2022.

Source: Reuters