DOJ questions Nvidia’s Hugging Face deal, sources say

The US Justice Department has been asking how Nvidia's ↘ 0.80% $12.93 billion purchase of open-source AI platform Hugging Face would affect competition in artificial intelligence, two people familiar with the matter told Reuters. According to those people, officials want to know whether the deal would let Nvidia "capture a fundamental distribution point for AI." Antitrust enforcers are asking these questions while they continue a years-long investigation into the chipmaker's conduct.reuters.com

The scrutiny targets Nvidia's biggest move yet into AI software. It also comes as the company's acquisition and investment strategy faces wider review, Bloomberg reported, citing the Reuters story.bloomberg.com

What officials are asking

The people said the department's questions cover how Nvidia might use Hugging Face to harm rivals and whether owning the platform could give it leverage. Officials are also asking about Hugging Face's competitors, Reuters reported. The broader probe covers Nvidia's acquisitions, investments and sales practices, and whether it has pressured customers.reuters.com

The inquiry has also looked at earlier deals. These include Nvidia's December 2025 purchase of SchedMD, its acquisition of Run:ai, and its 2025 agreement to license technology from chip startup Groq and hire its engineers. Officials have asked whether Nvidia offered bigger allocations of AI chips to customers who also bought its networking gear and Groq processors, the people told Reuters.reuters.com

Nvidia declined to comment, and Hugging Face did not respond. A DOJ spokesperson declined to discuss the matter but said that "it would be inappropriate for the Department to conduct a merger investigation under the guise of a conduct investigation," according to Reuters. The probe began under President Joe Biden and has continued under President Donald Trump. It may not lead to any action.reuters.com

The deal

Nvidia announced the purchase on September 3. About $11.9 billion goes to Hugging Face investors, and an equity-based retention program worth up to $1 billion covers staff who join Nvidia, Reuters reported. Nvidia expects the deal to close in the first half of 2027, pending regulatory approvals, Fortune India reported.reuters.com+1

Hugging Face has more than 18 million users, DW reported. Nvidia CEO Jensen Huang tried to reassure developers that the platform would stay neutral. "Nvidia compute will not be required to build on or deploy through Hugging Face," he wrote, The Verge reported.dw.com+1

Competitive backdrop

Nvidia holds the largest share of the AI chip market. Rivals Broadcom ↘ 1.94% and Alphabet's ↘ 12.29% Google design specialized processors together, and Advanced Micro Devices ↘ 2.08% has signed billion-dollar deals with AI labs, Reuters noted. Any DOJ action could affect the investing and acquisition strategy Nvidia has used to extend its reach across AI.reuters.com