The Justice Department is examining whether Nvidia’s proposed acquisition of Hugging Face could restrict competition in the artificial intelligence industry, Reuters reported on Wednesday, Oct. 28. The inquiry focuses on whether the deal would grant Nvidia control over a critical distribution channel for AI tools and models.
This investigation is part of a broader scrutiny of Nvidia’s business practices that the agency initiated during the Biden administration and has continued under the Trump administration. The wider probe covers Nvidia’s other acquisitions, investments, sales strategies, and allegations that the company pressures its customers, according to the report.
Antitrust Scrutiny of Nvidia’s Growth
The Justice Department’s review of the Nvidia Hugging Face deal comes as the agency looks closely at how the chipmaker expands its influence in the tech sector. Bloomberg reported in September that the department was also investigating whether Nvidia structured its licensing agreement with AI chip startup Groq to avoid antitrust review. The financial news outlet also noted that Nvidia has considered a deal with Reflection AI.
Reuters confirmed that the inquiries are ongoing. An investigation does not constitute evidence of wrongdoing and may not lead to lawsuits, the report stated. Both the Justice Department and Nvidia declined to comment on the claims when contacted by Reuters.
Nvidia’s Commitment to Open Access
Nvidia announced the agreement to acquire Hugging Face for $12.9 billion on Sept. 3. Founder and CEO Jensen Huang stated that the partnership would scale Hugging Face’s platform and strengthen its infrastructure. He emphasized that the acquisition would not restrict developers.
“Together, we will scale Hugging Face’s platform, strengthen its infrastructure, and expand access to AI for developers and institutions worldwide,” Huang said. He added that Hugging Face would remain an open platform for the entire AI ecosystem. According to Huang, developers will continue to choose the models, frameworks, clouds, and computing platforms they prefer. Nvidia compute will not be required to build on or deploy through Hugging Face.
Hugging Face CEO Clément Delangue told CNBC that the company needed more resources and scale. He noted that open-source AI was at a turning point during the summer. Delangue said the acquisition would provide the visibility and support necessary for the platform’s future.
CNBC confirmed the probe with an unnamed source after the Reuters report was published. The investigation highlights the increasing regulatory attention on major technology deals in the rapidly evolving AI market.
Source: PYMNTS
