US DOJ Examines Nvidia’s $12.93 Billion Hugging Face Deal Over AI Competition Concerns

The US Department of Justice (DOJ) is examining Nvidia’s proposed $12.93 billion acquisition of artificial intelligence platform Hugging Face, focusing on whether the transaction could affect competition across the rapidly expanding AI industry, according to people familiar with the matter.

The inquiry forms part of a broader antitrust examination of Nvidia’s acquisitions, investments and business practices. Officials are assessing whether the deal could give the chipmaker greater control over an important channel through which AI developers access models, datasets and software tools.

Regulators Assess Potential Impact on AI Competition

According to sources cited by Reuters, Justice Department officials have asked whether acquiring Hugging Face could allow Nvidia to strengthen its influence over the distribution of AI technology or gain an advantage over competing companies.

Hugging Face is widely used by developers and businesses to discover, share and build AI models and applications. Its platform supports an extensive open-source ecosystem, making it an important destination for organisations working on machine learning and generative AI.

Regulators are reportedly examining whether Nvidia could use its ownership of the platform to disadvantage rival chipmakers, cloud computing providers or AI companies. Officials are also asking questions about Hugging Face’s competitors as they evaluate the potential effects of the proposed acquisition.

The transaction is expected to close in the first half of 2027, according to Nvidia. The company has said Hugging Face will continue supporting a range of chipmakers, cloud providers and AI developers rather than limiting its services to Nvidia’s own technology.

Wider Antitrust Scrutiny of Nvidia

The Hugging Face inquiry is part of a broader investigation into Nvidia’s business conduct that began under former US President Joe Biden and has continued under President Donald Trump.

The department’s examination reportedly covers Nvidia’s acquisitions, investments, sales practices and interactions with customers. Investigators are looking into concerns about whether the company may have used its dominant position in AI chips to gain advantages in related markets.

Nvidia’s market position has become increasingly significant as demand for computing power rises. Its processors are widely used to train and operate advanced AI systems, while the company has expanded its presence through investments, acquisitions and partnerships across the technology sector.

Any regulatory action could have implications for Nvidia’s acquisition strategy and the wider AI industry. However, an investigation does not establish that a company has violated the law, and such inquiries do not necessarily lead to legal action.

Previous Deals Also Under Review

The DOJ has also examined other Nvidia transactions, including its acquisition of SchedMD, the developer of software used to manage workloads on high-performance computing systems. The acquisition raised concerns among some AI specialists about continued access to its open-source technology. Nvidia has pledged to maintain support and open access.

Investigators have also scrutinised Nvidia’s 2025 arrangement with AI chip startup Groq, under which Nvidia licensed technology and hired engineers. According to the sources, officials have explored whether Nvidia’s allocation of AI chips to customers could have been linked to purchases of its networking products or Groq processors.

The department has additionally looked at Nvidia’s acquisition of Run, a company whose software helps organisations manage and use AI computing resources more efficiently.

These inquiries reflect regulatory interest in how Nvidia’s influence in AI hardware could extend into software, computing infrastructure and other parts of the AI ecosystem.

Nvidia and Hugging Face Yet to Comment

Nvidia declined to comment on the latest inquiry, while representatives of Hugging Face did not respond to requests for comment. A DOJ spokesperson also declined to discuss matters before the department, citing its policy on pending investigations.

The spokesperson said the department under President Trump would continue to prioritise the advancement of artificial intelligence. The department also cautioned that it would be inappropriate to conduct a merger investigation under the guise of an investigation into business conduct.

There is no indication that President Trump has been involved in the Nvidia investigation, and the inquiry may not result in enforcement action.

What the Inquiry Could Mean for the AI Industry

The proposed acquisition brings together a leading AI chip supplier and a platform used by developers across the open-source AI community. That combination has drawn attention because access to models, software and computing resources can influence how companies develop and deploy AI products.

If regulators determine that the deal could restrict competition, Nvidia may face additional scrutiny or pressure to address specific concerns. The outcome could also influence how other major technology companies pursue acquisitions in the AI sector.

For now, the DOJ’s questions indicate that regulators are assessing the possible competitive effects of the transaction. The final outcome remains uncertain as Nvidia’s proposed purchase of Hugging Face moves towards its expected completion in 2027.