US Justice Department Asks Questions About Nvidia's $12.9 Billion Hugging Face Deal

Reuters reports the Justice Department is asking how Nvidia's roughly $12.9 billion purchase of AI platform Hugging Face would affect competition, part of a wider look at the chipmaker's recent dealmaking.

The US Department of Justice has been asking questions about Nvidia's agreement to buy Hugging Face for roughly $12.9 billion, according to a Reuters report published October 28 that cited two people familiar with the matter. Hugging Face is a widely used platform for hosting and sharing AI models and open-source developer tools.

Reuters reported that officials want to understand whether the deal would let Nvidia control a key distribution point for AI models and tools, and whether that position could be used to disadvantage rival chipmakers or competing AI platforms.

The inquiry is part of a broader, multi-year Justice Department look at Nvidia's conduct and acquisitions that reportedly predates the Hugging Face agreement. Other deals that have drawn scrutiny include Nvidia's purchase of cluster-scheduling company SchedMD and its licensing arrangement with AI chip startup Groq.

Nvidia declined to comment on the report, and Hugging Face did not respond to Reuters' request for comment. A Justice Department spokesperson would not discuss specifics, saying only that it would be inappropriate for the department to conduct a merger investigation under the guise of a conduct investigation.

Reuters noted that a government inquiry is not evidence of wrongdoing and does not necessarily lead to a lawsuit or a blocked deal. As of the report, no formal second request or merger challenge tied to the Hugging Face acquisition had been publicly disclosed.

Nvidia has said it expects the Hugging Face deal to close in the first half of 2027 and that the platform will remain neutral, continuing to support rival processors, clouds and software rather than favoring Nvidia's own hardware.

The scrutiny echoes Nvidia's experience with Arm: the company abandoned its roughly $40 billion bid for the chip designer in 2022 after the Federal Trade Commission sued to block it. With Nvidia now central to AI infrastructure worldwide, its acquisitions are drawing closer antitrust attention from US regulators.

From Spaqitech & Spaqi Consulting

Sources

This summary was written with AI assistance from the sources above. The image is illustrative and may not show the events described.