DOJ inquiry widens scrutiny of Nvidia's Hugging Face deal

The U.S. Justice Department has asked how Nvidia’s proposed $12.93 billion acquisition of Hugging Face could affect competition in artificial intelligence, according to an exclusive Reuters report citing two people familiar with the matter. The questions described in the report are fact-finding; no public complaint or formal challenge to the transaction has been announced.

Nvidia expects to close the proposed acquisition in the first half of 2027, subject to required approvals and other customary conditions. Nvidia said the agreement values Hugging Face at $12.93 billion. Its SEC filing describes about $11.9 billion for stockholders and an equity-based employee retention program of up to about $1 billion.

Officials asked whether the acquisition could give Nvidia control over a fundamental distribution point for AI models, allow the chipmaker to harm rivals or gain leverage, and affect companies competing with Hugging Face, Reuters reported. The department has not publicly confirmed those questions or the scope of the inquiry.

The inquiry details remain based on Reuters’ anonymous-source reporting. The questions sit alongside a broader, years-long Justice Department examination of Nvidia’s acquisitions, investments and sales practices, including possible pressure on customers, according to the report. That examination has looked at Nvidia’s purchases of SchedMD and Run:ai, as well as its 2025 technology-licensing and hiring transaction with Groq.

A government inquiry is not a finding of wrongdoing and may end without a lawsuit or other action. Available evidence does not establish whether the Hugging Face questions are part of preliminary merger review, a formal request for additional information, the broader conduct inquiry or another process. Federal merger-review guidance distinguishes preliminary information gathering from later outcomes such as closing an investigation, reaching a settlement or filing a legal challenge.

Nvidia announced the agreement on September 2 and said Hugging Face would continue supporting models, datasets and hardware chosen by users. The company also said Nvidia compute would not be required to build on or deploy through the platform.

Nvidia declined to comment on the reported inquiry, Hugging Face did not respond to Reuters’ request for comment, and a Justice Department spokesperson declined to discuss matters before the department, Reuters reported.