US DOJ examines Nvidia’s $12.9 billion Hugging Face deal over AI competition concerns

The US Department of Justice has asked questions about how Nvidia’s proposed $12.93 billion acquisition of the open-source artificial intelligence platform Hugging Face could affect competition in AI, according to two people familiar with the matter.

The inquiry is taking place while antitrust enforcers continue a years-long investigation into Nvidia’s business conduct, the two people said. The department’s recent questioning covers Nvidia’s acquisitions, investments and sales practices, and whether the chip designer has put pressure on its customers, they said.

On Hugging Face, Justice Department officials have asked whether the deal would allow Nvidia to capture a fundamental distribution point for AI, according to the people. The acquisition is expected to close in the first half of 2027, Nvidia has said. The company has also said Hugging Face would continue to support work with a range of chip, cloud and AI providers.

The details of the department’s questions about the Hugging Face deal, and of its continued pursuit of Nvidia’s conduct more broadly, are being reported for the first time.

Nvidia has become central to the technology economy and the AI boom. It has backed major AI companies such as Anthropic and OpenAI, and has encouraged data-centre development around the world so that its chips can meet AI’s heavy computing demands.

Any action by the Justice Department could affect the chip industry and test Nvidia’s strategy of using investments and acquisitions to extend its influence in AI. Government investigations are not evidence of wrongdoing and do not necessarily lead to lawsuits.

A Justice Department spokesperson declined to comment on any matter before the department, citing long-standing policy. The spokesperson added that the department under President Donald Trump would continue to prioritise the advancement of “Super Intelligence” for the benefit of the American people. Nvidia declined to comment. Hugging Face representatives did not respond to a request for comment.

The broad examination of Nvidia began under former President Joe Biden, a Democrat, and has continued under Trump, a Republican. During that 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 in the investigation, and the probe may not result in any Justice Department action.

As part of the investigation, the Justice Department has examined Nvidia’s acquisition of SchedMD, one of the people said. The December 2025 purchase raised concerns among AI specialists about their access to SchedMD’s open-source software, which helps run supercomputers relevant to national security. Nvidia has promised to continue open access and support.

Nvidia holds the largest share of the market for AI chips, which power tools such as ChatGPT, Anthropic’s Claude and similar products. A number 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 with AI software. Advanced Micro Devices has said it can produce technically superior hardware and has signed billion-dollar deals with several AI laboratories and cloud computing operators.

Nvidia’s market position has nonetheless made it an industry force and helped chief executive Jensen Huang develop a relationship with Trump, who has promoted American AI. Huang and Trump have often appeared together, and the chief executive joined 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.

Critics of Trump have previously accused his administration of political intervention at the Justice Department; the administration has disputed this. Such intervention would be unusual.

Staff-led investigations at the Justice Department often take years and can stretch from one administration to the next. The department routinely seeks input from companies when evaluating proposed mergers.