DOJ Probes Nvidia's $13 Billion Hugging Face Deal Over AI Distribution Grip

The U.S. Department of Justice is examining Nvidia's nearly $13 billion acquisition of Hugging Face, according to Reuters, and the inquiry centers on one question: who controls the distribution layer of the AI industry. The deal, agreed in September, would fold the leading open-source platform for hosting and testing AI models into the world's dominant AI chip supplier.

The department has made inquiries about how the Hugging Face purchase could change conditions for Nvidia's competitors, Reuters reports. Hugging Face is not merely a model repository. It also sells AI infrastructure. That combination, a distribution venue plus an infrastructure vendor, is what appears to trouble officials.

Why does a platform deal worry antitrust lawyers?

The concern is straightforward. Nvidia could use Hugging Face as a locked-in distribution channel for its own products, disadvantaging rival hardware and software vendors who depend on the platform's neutrality. The DOJ has not filed charges. It has asked questions. That distinction matters, and the report does not say whether a formal investigation will follow.

Nvidia has offered a familiar assurance. The company confirmed it will continue to support a range of chip and AI providers once the buyout completes. Hugging Face is expected to officially become part of Nvidia in the first half of 2027.

Tom's Hardware reached out to Nvidia for comment on the DOJ's concerns. No response had been received at the time of publication.

Is this scrutiny new for Nvidia?

No. The Hugging Face inquiry fits a longer pattern of U.S. government scrutiny that stretches back to the Biden administration and did not ease under President Trump. The president was reportedly tempted to break the company up, despite being unfamiliar with what it was.

The pressure runs on several tracks:

• Export controls restrict Nvidia's AI-focused hardware to approved entities, with shipments barred to China, Iran, North Korea and Russia.
• The DOJ examined Nvidia's purchase of SchedMD, whose software runs supercomputers tied to national security; Nvidia promised continued support as part of a larger three-year investigation into its conduct.
• Officials considered whether Nvidia offered larger AI chip allocations to customers who also bought its networking hardware and Groq chips.

That last item carries the largest number. Nvidia bought Groq for $20 billion in December 2025, a deal that included acquihiring key members of the AI chip startup's team, including its CEO.

What is not being said?

Both the SchedMD and Hugging Face cases follow the same script: Nvidia promises to keep supporting other providers, and regulators must decide whether a promise binds better than a structural remedy. A behavioral commitment fades. A divested asset does not. The Reuters report does not indicate which path officials are weighing here.

It also remains unclear whether the Groq allocation inquiry produced findings. Tom's Hardware's source describes officials as having "considered" the bundling question, which is weaker language than an active probe.

What happens next?

The clock runs to the first half of 2027, when Hugging Face is expected to close into Nvidia — unless the DOJ moves first, and nothing in the reporting yet says it will.