By Max A. Cherney, Jeffrey Dastin and Jody Godoy
SAN FRANCISCO, Oct 28 (Reuters) - The US Department of Justice has made inquiries about how Nvidia’s $12.93 billion deal to buy open-source platform Hugging Face would affect competition in artificial intelligence, at the same time as antitrust enforcers pursue their years-long investigation into the chip designer's conduct, two people familiar with the matter said.
The Justice Department's recent questioning covers Nvidia's acquisitions, investments,
sales practices, and whether the chip designer has exerted pressure on its customers, the two people said. On Hugging Face, Justice Department officials have asked whether the deal would let Nvidia capture a fundamental distribution point for AI, the people said. The acquisition is expected to close in the first half of 2027, Nvidia has said, adding that Hugging Face would continue to support work with a range of chip, cloud and AI providers.
The department's questions around the Hugging Face deal and details of its continued pursuit of Nvidia's conduct more broadly are reported for the first time here. Nvidia has become a cornerstone of the tech economy and AI boom, backing major players such as Anthropic and OpenAI while spurring data center development globally so its chips can power AI's voracious computing needs.
Any action by the DOJ could ripple through the chip industry and challenge Nvidia's investing and acquisition strategy that has extended its influence in AI. Government investigations are not evidence of wrongdoing and do not necessarily result in lawsuits.
A DOJ spokesperson declined to comment on any matters before the department, citing longstanding policy. The spokesperson added, "This DOJ under President Trump’s leadership will continue to prioritize advancement of Super Intelligence for the betterment of the American people."
Nvidia declined to comment, and Hugging Face representatives did not respond to a request for comment.
The broad Nvidia examination started under former Democratic President Joe Biden and has continued under the administration of Republican President Donald Trump, during which time Nvidia has been the most valuable company in the world and a singular force in AI. There is no indication that Trump has any involvement, and the probe may not result in any Justice Department action.
As part of the probe, the DOJ has examined Nvidia’s acquisition of SchedMD, one of the people said. The December 2025 purchase sparked worries among AI specialists about their access to SchedMD's open-source software, which helps run supercomputers relevant to national security. Nvidia has vowed to continue open access and support.
NVIDIA AND TRUMP
Nvidia has the biggest share of the market for AI chips, which power the likes of ChatGPT, Anthropic's Claude and similar tools. A host of startups and chip-design companies have challenged its dominance.
Competitors Broadcom and Alphabet's Google design processors together, seeking to beat Nvidia hardware with chips purpose-built for specific tasks and AI software. Advanced Micro Devices has said it can produce technically superior hardware and has struck billion-dollar deals with several AI labs and cloud computing operators.
Nvidia's market position has nonetheless made it an industry force and helped CEO Jensen Huang develop a relationship with Trump, who has touted American AI. Huang and Trump have made frequent appearances together, with the CEO joining the president's diplomatic trip to China. Trump, who has disclosed owning Nvidia stock, separately awarded Huang the National Medal of Science for advancing AI hardware.
Trump critics have previously accused the administration of political intervention at the DOJ, which the administration has disputed. Such intervention is traditionally out of the ordinary.
Staff-led investigations at the DOJ often take years and can stretch from one administration to the next. In addition, the DOJ routinely seeks input from companies when evaluating proposed mergers. "It would be inappropriate for the Department to conduct a merger investigation under the guise of a conduct investigation," the DOJ spokesperson said.
SCRUTINY OF OTHER NVIDIA DEALS
The DOJ has scrutinized Nvidia's conduct following other transactions, including its 2025 deal to license technology from chip startup Groq and hire its engineers, the people said. Officials have explored whether Nvidia unfairly offered larger allocations of AI chips if customers purchased its networking equipment and Groq processors, raising questions about whether Nvidia used its dominant product to push into a newer market, the people said.
Nvidia declined to comment, and Groq did not respond to a request for comment.
The DOJ has also looked at Nvidia's acquisition of Run:ai, which makes software that helps AI chips run more efficiently, the people said.
The department's questions about the proposed Hugging Face acquisition include identifying how Nvidia might use the AI platform to harm rivals in the AI market, and whether Nvidia could use the newly acquired business to gain leverage, the people said.
Officials are also asking questions about Hugging Face's competitors, said the people.
(Reporting by Max A. Cherney and Jeffrey Dastin in San Francisco and Jody Godoy in New York; Editing by Peter Henderson, David Gaffen and Matthew Lewis)
