DOJ probes Nvidia's $12.93 billion acquisition of Hugging Face

The DOJ's antitrust inquiry

The US Department of Justice has begun inquiring into Nvidia's plan to acquire Hugging Face for $12.93 billion. This move has caught the attention of antitrust enforcers who are concerned about the concentration of power in the artificial intelligence sector. The government wants to know if the deal will allow Nvidia to seize a fundamental distribution point for AI technologies.

As reported by CNBCTV18, the investigation is happening alongside a much larger, years-long probe into Nvidia's general business conduct. Officials are looking at how the chip designer interacts with its customers and whether it exerts undue pressure on them. The goal is to determine if Nvidia is using its dominant position to unfairly influence the broader tech economy.

The Justice Department is specifically asking how the acquisition might harm rivals in the AI market. They are also seeking information on Hugging Face's competitors to get a full picture of the landscape. While the investigation is ongoing, a DOJ spokesperson stated that the department will continue to prioritize the advancement of Super Intelligence for the American people.

Hugging Face and Nvidia's role

Hugging Face serves as a major open-source platform where developers share and access AI models. Because it is a central hub for the industry, its ownership is a significant point of interest for regulators. Nvidia, meanwhile, has become a cornerstone of the AI boom by providing the chips necessary to power massive computing needs.

Nvidia has already established deep ties with major players like OpenAI and Anthropic. By backing these companies and developing global data centers, Nvidia has positioned itself as a singular force in the hardware space. The acquisition of Hugging Face would theoretically give them a foothold in the software and distribution side of the industry as well.

Nvidia has stated that the acquisition is expected to close in the first half of 2027. The company has also promised that Hugging Face will continue to support a wide range of chip, cloud, and AI providers. This commitment is intended to reassure the public that the platform will remain accessible to the broader developer community.

A pattern of scrutiny

The Hugging Face deal is not the only transaction under the microscope. The DOJ has also examined Nvidia's 2025 deal to license technology from the startup Groq. During that process, officials explored whether Nvidia offered larger chip allocations only to customers who also bought its networking equipment or Groq processors.

The department also looked at Nvidia's acquisition of SchedMD, a company whose open-source software helps run supercomputers. This purchase caused concern among specialists who feared it might limit access to tools relevant to national security. In response, Nvidia has vowed to maintain open access to the software and continue its support for the community.

Additionally, the DOJ has scrutinized Nvidia's purchase of Run:ai, which provides software to help AI chips run more efficiently. These various inquiries suggest a broad interest in how Nvidia uses its dominant hardware to expand into software and other adjacent markets. Regulators want to ensure that Nvidia's growth doesn't come at the expense of fair competition.

Market competition and politics

Nvidia currently holds the largest market share for the chips that power tools like ChatGPT and Claude. However, it faces increasing pressure from competitors like Broadcom and Alphabet's Google, who are designing purpose-built processors. Advanced Micro Devices has also claimed it can produce technically superior hardware and has signed multi-billion dollar deals with AI labs.

The political landscape surrounding Nvidia is also complex. CEO Jensen Huang has developed a relationship with President Trump, who has touted American AI and awarded Huang the National Medal of Science. Trump has also disclosed owning Nvidia stock, which adds a layer of public interest to the company's activities.

Despite the political ties, the DOJ investigation is a staff-led process that has continued across different administrations. It began under the Biden administration and has persisted into the current Trump administration. While the probe may not result in a lawsuit, it represents a significant hurdle for Nvidia's long-term acquisition and investment strategy.