DOJ Probes Nvidia's $13 Billion Hugging Face Acquisition

The U.S. Department of Justice is asking whether Nvidia's $13 billion purchase of Hugging Face will distort competition in artificial intelligence. Reuters reports the department has made inquiries into how the deal could change conditions for Nvidia's competitors.

Nvidia agreed to buy Hugging Face in September for almost $13 billion. Hugging Face operates an open-source platform for hosting and testing new AI models. It also sells AI infrastructure. That combination sits at the center of the DOJ's concerns.

What does the deal change for competitors?

The core question is distribution. Hugging Face functions as a key distribution point for AI models. Regulators reportedly worry the acquisition could let Nvidia lock in a primary channel for its own products and squeeze rivals off the platform.

Nvidia has confirmed it will continue to support a range of chip and AI providers once the buyout completes. The deal is expected to close in the first half of 2027, when Hugging Face officially becomes part of Nvidia.

The mechanism is straightforward. A chip vendor that owns the platform where developers test and deploy models gains visibility into competing hardware and influence over what those developers use. Antitrust investigators examine exactly this kind of vertical tie.

Why is this not Nvidia's first encounter with the DOJ?

The Hugging Face inquiry is the latest in a pattern of U.S. government scrutiny stretching back to the Biden administration. That scrutiny did not ease when the Trump administration took office. The U.S. president was reportedly tempted to break Nvidia up, despite being unfamiliar with what the company did.

Other government actions have piled up:

• Export controls. Nvidia's AI-focused hardware can only be sold to approved entities. It cannot ship to China, Iran, North Korea, or Russia.
• The SchedMD purchase. The DOJ examined Nvidia's acquisition of SchedMD, whose software runs supercomputers with national security ties. Nvidia promised continued software support as part of a broader three-year investigation into its conduct.
• Chip allocation practices. Officials have considered whether Nvidia offered larger allocations of its AI chips to customers who also bought its networking hardware and Groq chips.

How does the Groq deal factor in?

Nvidia bought Groq for $20 billion in December 2025. The deal included acquihires of key members of the AI chip startup's team, including its CEO.

That acquisition matters to the allocation inquiry because it tied chip supply, networking gear, and a competitor's technology into one vendor's portfolio. Investigators reportedly want to know whether customers who bought across that portfolio received favorable treatment on scarce AI chip supply.

This question cuts to the heart of Nvidia's market power. Its chips are the scarce input the entire AI industry needs. If allocation favors customers who buy adjacent products, competitors in networking and silicon lose access or pay more.

What happens next?

The DOJ has not filed a formal complaint, according to the report. Its inquiries so far are questions, not charges. Nvidia has faced this posture before and closed its SchedMD and Groq deals while under investigation.

For Hugging Face users and competing chip vendors, the practical stakes are concrete. If the platform stays neutral after 2027, little changes. If Nvidia tilts it toward its own hardware, developers gain one less independent venue for model hosting and testing.

Tom's Hardware reached out to Nvidia for comment on the DOJ's concerns. Nvidia had not responded at the time of publication.