The DOJ Is Asking Whether Nvidia's $12.9 Billion Hugging Face Deal Gives It Control of How AI Gets Shared

Nvidia already sells the chips nearly everyone trains AI on. Now the Justice Department wants to know whether buying Hugging Face, where millions of developers share and download models, hands it the distribution point too.

The DOJ is inquiring whether the deal could harm competition by giving Nvidia control of that key gateway, people familiar with the matter told Reuters on Wednesday. CNBC confirmed the probe, reporting that the department has asked Nvidia for information on how the deal could affect competitors. The DOJ and Nvidia declined to comment.

The front door for open-source AI

Nvidia announced the $12.9 billion acquisition on Sept. 3. At the time, it 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. Hugging Face also sells infrastructure and collaboration tools, including to chip companies.

The closest comparison is Microsoft buying GitHub for $7.5 billion in 2018. Hugging Face CEO Clement Delangue told CNBC that over the summer the company concluded open-source AI "was at the turning point" and needed more resources, scale and visibility.

Jensen Huang tried to get ahead of the obvious worry. "Hugging Face will remain an open platform for the entire AI ecosystem," he said, and "Nvidia compute will not be required to build on or deploy through Hugging Face." He framed the deal as a way to "scale Hugging Face's platform, strengthen its infrastructure, and expand access to AI for developers and institutions worldwide." Nvidia has said Hugging Face would keep working with a range of chip, cloud and AI companies.

Second megadeal, same question

Hugging Face is Nvidia's second-biggest purchase, behind the $20 billion it paid for Groq assets at the end of last year. That deal is under DOJ scrutiny too; Bloomberg reported in September that the department was examining whether Nvidia structured the Groq licensing agreement to avoid antitrust review. Bloomberg has also reported Nvidia has considered a deal with Reflection AI.

Both inquiries sit inside a larger investigation of Nvidia's conduct that began under the Biden administration and has continued under Trump, according to PYMNTS. Investigators are asking about Nvidia's other acquisitions, its investments, its sales practices and whether it pressures customers.

An investigation is not evidence of wrongdoing, and it may never become a lawsuit. But regulators are now asking whether the company that sells the hardware most AI runs on should also own the place where models get passed around.

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