Nvidia faces DOJ inquiry on Hugging Face deal amid broader AI antitrust probe

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Highlights

Nvidia faces a DOJ antitrust inquiry into its proposed Hugging Face acquisition, including questions about potential control over AI distribution platforms and market leverage.
The DOJ is examining Nvidia's broader deal activity, such as the SchedMD acquisition in December 2025 and the 2025 technology license agreement with Groq.
Any DOJ action could significantly impact the AI chip market, where Nvidia is the dominant supplier, amid rising competition from Broadcom, Google, and AMD.

DOJ questions center on AI distribution and deal strategy

As first reported by Reuters, the U.S. Department of Justice has recently asked questions about Nvidia's acquisitions, investments, sales practices and whether it has pressured customers, according to two people familiar with the matter. On the proposed Hugging Face acquisition, officials are asking whether the deal would allow Nvidia to control a key distribution point in AI and use the platform to harm rivals or gain leverage in adjacent markets.

Nvidia has said the acquisition is expected to close in the first half of 2027 and that Hugging Face would continue to support a range of chip, cloud and AI providers. Nvidia declined to comment, while Hugging Face representatives did not respond to a request for comment.

A DOJ spokesperson declined to comment on matters before the department, citing longstanding policy, but said the department under President Donald Trump will continue to prioritize the advancement of "Super Intelligence." The spokesperson also said it would be inappropriate for the department to conduct a merger investigation under the guise of a conduct investigation.

Broader probe could reshape AI chip competition

The examination of Nvidia began under former President Joe Biden and continues under Trump, with no indication the president is involved and no assurance the probe leads to enforcement action. Still, any DOJ move could reverberate across the chip sector because Nvidia holds the largest share of the AI chip market and has expanded its reach through investments, licensing agreements and acquisitions.

As part of the wider inquiry, officials have examined Nvidia's December 2025 purchase of SchedMD, whose open-source software helps run supercomputers used in national security contexts, as well as Nvidia's acquisition of Run:ai. The DOJ has also scrutinized Nvidia's 2025 agreement to license technology from Groq and hire its engineers, including whether Nvidia tied larger allocations of AI chips to purchases of networking equipment and Groq processors.

Nvidia's scale has made it central to the AI boom, supplying hardware used for systems such as ChatGPT and Anthropic's Claude and backing companies including Anthropic and OpenAI. Rivals including Broadcom, Alphabet's Google and Advanced Micro Devices are trying to challenge that dominance with specialized processors and software, making the DOJ's review of Nvidia's dealmaking and market behavior significant for competition across the AI industry.

In our earlier article on the AI-linked tech sell-off, we noted that semiconductor and data-center-related stocks slid sharply as investors reassessed lofty AI valuations. The downturn was compounded by oil hitting $110 a barrel, stoking inflation worries and adding uncertainty around the Fed’s rate path—factors that can raise financing costs for AI infrastructure buildouts. That risk-off backdrop helps explain why moves by dominant players like Nvidia, and any regulatory pressure on their strategy, are being watched so closely by markets.

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