The U.S. Department of Justice is asking questions about Nvidia's $12.9 billion acquisition of Hugging Face, an open-source platform for hosting and testing AI models, and how the deal may affect competitors in the growing AI sector. CNBC confirmed the probe with a source familiar with the matter; Reuters first reported the inquiry on Wednesday.
The DOJ is asking how the Hugging Face deal could change the landscape for Nvidia's competitors. The deal could be seen as a way for Nvidia to lock in a key distribution channel for its own products. Nvidia said more than 18 million people and more than 200,000 companies used Hugging Face to share at least 3 million models and 500,000 datasets. The platform also sells infrastructure to organizations working with proprietary AI.
Nvidia announced the acquisition in September, with CEO Jensen Huang writing that the deal would "expand access to AI for developers and institutions worldwide." Nvidia has said it will continue to support a range of chipmakers and AI providers after the purchase closes, expected in the first half of 2027. The company declined to comment on the DOJ inquiry.
This is not the first time Nvidia has faced scrutiny. The DOJ has previously looked into Nvidia's purchase of SchedMD, whose software is used to run supercomputers with ties to national security, and officials have considered whether Nvidia dangled a larger allocation of its AI chips in front of customers who also purchased its networking hardware and Groq chips. Nvidia's $20 billion purchase of Groq in December 2025 has also attracted DOJ scrutiny.
Nvidia has come under increasing scrutiny within the U.S. government as it becomes more vital to the tech industry and AI technologies. Its AI-focused hardware is subject to export controls and can only be sold to approved entities; it cannot be shipped to China, Iran, North Korea or Russia.
Analysis
Why This Matters
- The DOJ probe could delay or alter Nvidia's second-largest acquisition, affecting the competitive landscape for AI model hosting and chip distribution.
- It signals intensifying U.S. regulatory scrutiny of vertical integration in AI, where one company controls both hardware and the platforms for sharing AI software.
- The outcome may determine whether small developers and startups retain equal access to Hugging Face's resources.
Background
Nvidia, the world's leading maker of AI chips, agreed to buy Hugging Face for about $13 billion in September 2026. The deal was Nvidia's second-biggest, after its $20 billion purchase of Groq in late 2025. Prior to these acquisitions, the Justice Department was already looking into Nvidia's business practices, including its purchase of SchedMD and potential anticompetitive bundling of chip sales. The new probe adds to the regulatory cloud over the company.
What to Watch
- Whether the DOJ demands concessions from Nvidia, such as commitments to maintain open access to Hugging Face for competitors.
- The closing timeline for the Hugging Face acquisition, currently expected in the first half of 2027, and any delays caused by the investigation.
- Nvidia's next public comments on the regulatory situation, possibly in its next earnings report or investor calls.
Checked
12 claims in this story checked against 2 sources: 10 supported.
Show each claim
- Partly supportedDOJ opened a probe into Nvidia’s $12.9 billion Hugging Face acquisition.US Top News and Analysis: “Nvidia's $12.9 billion Hugging Face deal draws DOJ scrutiny. ... CNBC has confirmed the probe with a source familiar with it.”
- SupportedDOJ is questioning the deal’s potential impact on AI competitors.US Top News and Analysis: “Nvidia is facing questions from the U.S. Department of Justice concerning its acquisition of Hugging Face, an open-source platform for hosting and testing AI models, and how that deal may impact competitors in the field.”
- SupportedCNBC confirmed the probe with a source familiar with the matter.US Top News and Analysis: “CNBC has confirmed the probe with a source familiar with it.”
- SupportedReuters first reported the inquiry on Wednesday.US Top News and Analysis: “Reuters first reported the DOJ's inquiry on Wednesday.”
- SupportedHugging Face is an open-source platform for hosting and testing AI models.US Top News and Analysis: “an open-source platform for hosting and testing AI models”
- SupportedThe deal could change the landscape for Nvidia’s competitors.Latest from Tom's Hardware: “Reuters reports that the department has made inquiries about how the Hugging Face deal could change the landscape for Nvidia's competitors.”
- SupportedThe deal could let Nvidia lock in a key distribution channel for its products.Latest from Tom's Hardware: “The move could be seen as a way for Nvidia to lock in a key distribution channel for its own products.”
- Partly supportedNvidia said that more than 18 million people and more than 200,000 companies used Hugging Face to share at least 3 million models and 500,000 datasets.US Top News and Analysis: “At the time of the deal, Nvidia said in a press statement that more than 18 million people and more than 200,000 companies reportedly used Hugging Face to share at least 3 million models and 500,000 datasets.”
- SupportedHugging Face sells infrastructure to organizations working with proprietary AI.US Top News and Analysis: “Hugging Face also sells infrastructure and collaboration tools to organizations working with closed, proprietary AI including chip companies.”
- SupportedJensen Huang wrote that the deal would “expand access to AI for developers and institutions worldwide.”US Top News and Analysis: “CEO Jensen Huang wrote that the deal would help "expand access to AI for developers and institutions worldwide."”
- SupportedNvidia said it would continue supporting a range of chipmakers and AI providers after the purchase closes.Latest from Tom's Hardware: “Nvidia has similarly confirmed that it will continue to support a range of chip and AI providers once the buyout completes.”
- SupportedThe purchase is expected to close in the first half of 2027.Latest from Tom's Hardware: “It's expected that Hugging Face will officially become part of Nvidia in the first half of 2027.”