The $12.9 billion acquisition of Hugging Face is being targeted by the Department of Justice: Will Nvidia (NVDA.US) stop AI's “distribution throat”?

The Zhitong Finance App learned that according to two people familiar with the matter, the US Department of Justice (DOJ) has begun an inquiry about Nvidia (NVDA.US)'s transaction to acquire the open source platform Hugging Face for $12.93 billion to understand how this deal will affect competition in the field of artificial intelligence; at the same time, antitrust enforcers are still investigating the chip design company's long-standing behavior over several years.

The two people familiar with the matter mentioned above said that recent inquiries from the Ministry of Justice covered Nvidia's acquisition, investment, and sales practices, and whether the chip design company had put pressure on its customers. Regarding Hugging Face, Justice Department officials have asked if this deal will allow Nvidia to master a basic distribution node for artificial intelligence. Nvidia previously stated that the acquisition is expected to be completed in the first half of 2027, adding that Hugging Face will continue to support cooperation with various chip, cloud and AI providers.

Questions raised by the Department of Justice surrounding the Hugging Face deal, and details of a broader ongoing investigation into Nvidia's actions have been reported for the first time. Nvidia has become the cornerstone of the technological economy and AI prosperity. It has invested in major players such as Anthropic and OpenAI, while promoting data center construction on a global scale so that its chips can meet the huge computing power needs of AI.

Any action by the Department of Justice could trigger a ripple effect in the chip industry and challenge Nvidia's investment and acquisition strategy to extend its influence in the AI field. Government investigations are not evidence of misconduct, nor do they necessarily lead to lawsuits.

A Justice Department spokesperson declined to comment on any matter the Ministry had not yet addressed, citing long-standing policies. The spokesperson added, “The Department of Justice, under President Trump, will continue to prioritize the development of Super Intelligence (Super Intelligence) for the benefit of the American people.”

This extensive investigation into Nvidia began during the tenure of former Democratic President Joe Biden and continued during the administration of Republican President Trump. During this period, Nvidia has always been the company with the highest market capitalization in the world, and it is also a unique force in the AI field. There is currently no indication that Trump is involved in this, and the investigation will not necessarily lead to any action by the Department of Justice.

As part of the investigation, the Department of Justice has launched a review of Nvidia's acquisition of SchedMD, according to one of those familiar with the matter. The acquisition, which was reached in December 2025, raised concerns among AI experts about whether they could continue to obtain SchedMD open source software, which is used to run supercomputers related to national security. Nvidia has promised continued open access and support.

Nvidia's political and commercial relationship with Trump

Nvidia has the largest share of the AI chip market. These chips provide computing power for ChatGPT, Anthropic's Claude, and similar tools. Numerous startups and chip design firms are challenging their dominance.

Competitor Broadcom (AVGO.US) and Alphabet's Google (GOOGL.US) teamed up to design a processor in an attempt to surpass Nvidia hardware with chips tailored to specific tasks and AI software. AMD (AMD.US) said it can produce technologically superior hardware and has reached multi-billion dollar deals with AI laboratories and cloud computing operators.

Despite this, Nvidia's market position has made it an industry force and helped CEO Hwang In-hoon establish a relationship with Trump, the driving force for American AI. Hwang In-hoon and Trump made frequent appearances together, and the CEO also joined the president's diplomatic trip to China. Trump previously disclosed his ownership of Nvidia shares and also awarded the National Medal of Science to Hwang In-hoon in recognition of promoting the development of AI hardware.

Trump's critics have previously accused the government of interfering in the affairs of the Department of Justice, and the administration has denied this. Such interventions have historically been unconventional.

Investigations led by Ministry of Justice staff often take years and may span from one administration to the next. Additionally, the Department of Justice usually consults businesses when evaluating proposed mergers. A Ministry of Justice spokesman said, “It is inappropriate for the Department of Justice to launch a merger investigation under the name of conduct investigation.”

A review of other Nvidia deals

According to those familiar with the matter, the Justice Department has reviewed Nvidia's actions after other deals, including its 2025 deal to obtain technology licenses from chip startup Groq and hire its engineers. People familiar with the matter said that officials have investigated whether Nvidia unfairly provided larger amounts of AI chip allocations when customers purchased their network equipment and Groq processors, raising questions about whether Nvidia is using its leading products to enter new markets.

According to people familiar with the matter, the Ministry of Justice has also reviewed Nvidia's acquisition of Run:ai. The software developed by the latter helps improve the efficiency of AI chip operation.

According to people familiar with the matter, questions raised by the Department of Justice surrounding the proposed acquisition of Hugging Face include clarifying how Nvidia may use the AI platform to damage competitors in the AI market, and whether Nvidia may use the newly acquired business to gain leverage. Officials are also raising questions about Hugging Face's rivals.