The United States Department of Justice has made inquiries about how NVIDIA’s $12.93 billion deal to buy open-source AI platform Hugging Face would affect competition in artificial intelligence, Reuters reported exclusively on 28 October 2026. The questions sit alongside a years-long investigation into NVIDIA’s conduct, and officials have asked whether the deal would let NVIDIA capture what sources called a fundamental distribution point for AI.
What the Justice Department is asking
According to two people familiar with the matter, the department’s recent questioning covers NVIDIA’s acquisitions, investments, sales practices, and whether the chip designer has exerted pressure on its customers. On Hugging Face specifically, officials asked how NVIDIA might use the platform to harm rivals, gain leverage in the AI market, and affect the platform’s competitors.
The acquisition is expected to close in the first half of 2027, NVIDIA has said, adding that Hugging Face would keep supporting a range of chip, cloud and AI providers. That open-access promise is central to the inquiry, because Hugging Face is where developers discover, share and run models, whatever hardware they use.
Reuters stresses an important limit on the story. Government investigations are not evidence of wrongdoing and do not necessarily result in lawsuits. A Justice Department spokesperson declined to comment on any matters before the department, NVIDIA declined to comment, and Hugging Face representatives did not respond to a request for comment.
A probe that spans two presidencies
The broad NVIDIA examination started under former President Joe Biden and has continued under President Donald Trump, Reuters reported, with no indication that Trump has any involvement. Staff-led investigations of this kind often take years and can stretch from one administration to the next, and the probe may not result in any Justice Department action at all.
As part of the same examination, the department has looked at NVIDIA’s December 2025 acquisition of SchedMD, whose open-source software helps run supercomputers relevant to national security. That purchase sparked worries among AI specialists about access to the software, and NVIDIA has vowed to continue open access and support for it.
Officials have also scrutinised NVIDIA’s 2025 deal to license technology from chip startup Groq and hire its engineers. They explored whether NVIDIA unfairly offered larger allocations of AI chips if customers also purchased its networking equipment and Groq processors. The department has also looked at NVIDIA’s acquisition of Run:ai, which makes software that helps AI chips run more efficiently.
Why It Matters
NVIDIA holds the biggest share of the market for AI chips, which power tools including ChatGPT and Anthropic’s Claude, and it has become a cornerstone of the AI economy. Any action by the Justice Department could ripple through the chip industry and challenge an investing and acquisition strategy that has extended NVIDIA’s influence well beyond selling hardware.
The Hugging Face deal differs from a chip or software acquisition. Buying the platform where models are shared could, in the department’s framing, give NVIDIA control over distribution itself, not just the chips models run on. That is why the “distribution point” question matters more than the price tag alone.
Competitors are already trying to loosen NVIDIA’s grip. Broadcom and Google design processors together for specific tasks, and Advanced Micro Devices says it can produce technically superior hardware and has struck billion-dollar deals with labs and cloud operators. OpenAI’s reported plan to buy Google AI chips shows how even NVIDIA’s biggest customers are looking for alternatives.
A procedural dispute runs underneath the substance. The Justice Department spokesperson said it would be inappropriate to run a merger investigation under the guise of a conduct investigation, while noting the department routinely seeks company input on proposed mergers. That line will shape whether the Hugging Face questions become a formal challenge.
For developers, the stakes are access and neutrality. If Hugging Face stays open to every chip and cloud provider, as NVIDIA promised, the deal changes little day to day. If access starts to favour NVIDIA hardware, its value as a shared commons falls. NVIDIA’s product work this week, including a 40-language transcription model, shows it expanding on both fronts.
Background
NVIDIA’s rise to the world’s most valuable company has been built on AI chips, but its recent deals reach into software, networking and now the distribution layer for AI models themselves.
Source: Reuters exclusive
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