Nvidia-Huggingface Deal Faces Scrutiny

GRAND RAPIDS, MI. - The U.S. Department of Justice (DOJ) is investigating Nvidia's $12.93 billion agreement to acquire the open-source AI platform Hugging Face. The inquiry, confirmed on October 28, 2026, aims to examine potential impacts on competition within the artificial intelligence sector. This review forms part of a wider examination of Nvidia's business practices, which also includes scrutiny of its licensing agreement with AI chip startup Groq as of September 2026.

Nvidia announced the Hugging Face acquisition on September 3, 2026. The deal comprises approximately $11.9 billion for Hugging Face shareholders and up to $1 billion in equity-based retention awards for employees. Nvidia anticipates the transaction will conclude in the first half of 2027, subject to regulatory approvals. Nvidia states Hugging Face will continue as an open platform, supporting open-source and open-weight models from all developers without requiring Nvidia hardware for deployment.

Nvidia positions the acquisition as a pro-competitive measure, aiming to broaden access to open-weight AI models and accelerate their development. The company highlights its role as the largest contributor of open models and data to Hugging Face, having released over 500 models and 250 open datasets. In 2025, Hugging Face declined a $500 million investment offer from Nvidia that valued the company at $7 billion. Hugging Face's annualized revenue stands around $150 million.