The US Justice Department is looking into whether Nvidia's planned purchase of Hugging Face, valued at about $12.93 billion, could hurt competition in AI. Reuters reported the inquiry on 28 October, citing people familiar with it, and CNBC later confirmed it through its own source.
“During the summer, I think we realized that Hugging Face and open-source AI in general was at the turning point, and that it needed more, more resources, more scale, more visibility.”
Clément Delangue, Hugging Face CEO, to CNBC, to CNBC · pymnts.com ↗
Nvidia announced the deal on 3 September and expects it to close in the first half of 2027, pending regulatory approval. Hugging Face hosts more than three million models and serves over 200,000 companies, among them users of rival chips and clouds. Investigators are asking whether Nvidia could use that position as a distribution channel to widen its market power and disadvantage competitors.
The Hugging Face logo on a phone screen, with the platform's homepage on a monitor behind it
Image: PYMNTS
The inquiry sits beside a longer DOJ probe of Nvidia's conduct, begun under the Biden administration and continued under Trump. It also covers other acquisitions, including Run:ai and SchedMD, and whether Nvidia steered scarce chips to customers who also bought its networking gear and Groq processors. Reports differ on what the Groq licensing arrangement was worth: $17 billion in one, $20 billion in another.
About Nvidia
Nvidia has run into regulators over big purchases before. In October 2021 the European Commission opened a competition investigation into its proposed $40 billion purchase of Arm from SoftBank, and in early February 2022 the two companies dropped the deal, citing significant regulatory challenges.
In August 2024 the US Justice Department opened an investigation into Nvidia's roughly $700 million purchase of Run:ai, an Israeli AI-workload software firm, over fears it would entrench Nvidia's position and over claims that it punished customers who also bought rival products. By early September 2024 the department had issued a subpoena to Nvidia in its antitrust probe.
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Nvidia says Hugging Face will stay open to rival chip, cloud and model providers, and that Nvidia compute will not be required. No violation has been established, and an investigation may not end in a lawsuit.