US Justice Department Asks How Nvidia's $12.9 Billion Hugging Face Deal Affects AI Competition

The US Department of Justice has asked how Nvidia's $12.93 billion deal to buy Hugging Face would affect competition in artificial intelligence, Reuters reported on October 28, 2026, citing two people familiar with the matter. Officials want to know whether the purchase would let Nvidia capture a fundamental distribution point for AI, according to the report.

Nvidia announced the acquisition on September 3, 2026 and expects it to close in the first half of 2027. The reported questions add to the antitrust pressure on AI companies that has grown as Nvidia moves from chips into models and software, and they run alongside a separate, years-long DOJ investigation into Nvidia's conduct that began under President Joe Biden (Reuters).

What did Reuters report about the DOJ and Hugging Face?

Justice Department officials have asked whether buying Hugging Face would give Nvidia a fundamental distribution point for AI, how Nvidia might use the platform to harm rivals, and whether it could use the business to gain bargaining power, two people told Reuters on October 28, 2026. Officials are also asking about Hugging Face's competitors, according to the report.

This is a reported inquiry, not an announced action. Reuters notes that government investigations are not evidence of wrongdoing and that the probe may not result in any Justice Department action. Bloomberg also carried the news, attributing it to Reuters.

A DOJ spokesperson declined to comment on matters before the department, citing longstanding policy, but added a statement about the department's priorities.

The spokesperson also told Reuters that it "would be inappropriate for the Department to conduct a merger investigation under the guise of a conduct investigation." Nvidia declined to comment, and Hugging Face did not respond to Reuters' request for comment.

Why would Hugging Face matter to antitrust enforcers?

Hugging Face is the main public hub where developers share open AI models and datasets, so its sale to the leading AI chipmaker raises the question of whether it stays neutral. Nvidia says more than 18 million developers and 200,000 companies use the platform, which hosts more than 3 million models, 500,000 datasets and 1 million applications, according to Jensen Huang's deal announcement.

Nvidia is already the biggest single presence there. The same announcement calls Nvidia the largest contributor of open models and data to Hugging Face, with more than 500 models and 250 datasets, including its own Nemotron families such as Nemotron 3.5 Super VL. Set next to the question Reuters says officials are asking, the deal would put the platform's largest publisher in charge of the platform itself.

Huang wrote that Hugging Face "will remain an open platform for the entire AI ecosystem" and that Nvidia compute will not be required to build on or deploy through it. Those are company commitments; the DOJ questions reported by Reuters are about whether the structure itself gives Nvidia room to favor its own products or disadvantage rivals.

The deal is also large by Nvidia's standards. It is Nvidia's biggest acquisition; the previous record was the $6.9 billion it paid for Mellanox in 2019, according to The Next Web, which also puts the price at roughly 86 times Hugging Face's reported $150 million in annualized revenue. Nvidia's earlier $40 billion bid for Arm collapsed in 2022 after objections from competition authorities in the US and Europe, the same outlet notes.

What else is the Justice Department examining at Nvidia?

The broader DOJ investigation covers Nvidia's acquisitions, investments, sales practices and whether it has pressured customers, two people told Reuters on October 28, 2026. The probe began under President Joe Biden and has continued under President Donald Trump, according to the report.

As part of that probe, the DOJ has examined Nvidia's December 2025 purchase of SchedMD, which makes open source software used to run supercomputers, and its acquisition of Run:ai, which makes software that helps AI chips run more efficiently, Reuters reports. Officials have also explored whether Nvidia offered customers larger allocations of AI chips if they also bought its networking equipment and Groq processors, according to the same people.

That Groq angle builds on earlier reporting. The New York Times reported on September 9, 2026 that the DOJ was examining whether Nvidia structured its December 2025 deal with Groq, a license to the startup's chip technology plus the hiring of its leaders, in a way that avoided merger review (NYT via The Next Web). The Hugging Face deal is different: it is an outright purchase that, at this size, needs clearance in several jurisdictions, according to The Next Web.

Nvidia has more deals in motion. The Financial Times reported on October 10, 2026 that Nvidia is in talks to buy or invest more in Reflection AI, an open weight model startup it already backs. Outside the US, France's competition authority said in July 2026 that its long-running inquiry into Nvidia was nearing its end (Reuters via The Next Web).

Reuters also notes that Trump has disclosed owning Nvidia stock, and that there is no indication he has any involvement in the probe.

What we don't know yet

• Whether the DOJ questions will lead to a formal challenge, conditions on the deal or a clearance.
• Which competition authorities outside the US will review the purchase, and on what timeline.
• What Nvidia and Hugging Face say about the inquiry, since Nvidia declined to comment and Hugging Face did not respond to Reuters.
• Whether the expected closing in the first half of 2027 still holds.