The US Department of Justice is examining Nvidia’s $12.93 billion plan to buy Hugging Face. Regulators worry the deal could give the chipmaker an unfair advantage over rivals. Nvidia said the platform would continue to support many chipmakers and cloud providers. The acquisition is expected to close in early 2027.

Nvidia’s plan to buy open-source AI platform Hugging Face for $12.93 billion has drawn scrutiny from US regulators, who are examining whether the deal could give the chipmaker an unfair advantage over rivals, Reuters reported on Thursday, citing people familiar with the matter.

The US Department of Justice (DOJ) has asked questions about how the proposed acquisition could affect competition in artificial intelligence, including whether it would give Nvidia greater control over an important platform for distributing AI models and tools, the report said.

The inquiry comes as Nvidia faces wider scrutiny of its acquisitions, investments, sales practices and dealings with customers. The company has become a major force in the AI industry, supplying chips used to train and run AI systems while investing in businesses across the sector.

Nvidia has said the Hugging Face deal is expected to close in the first half of 2027. It has also said the platform would continue to support a range of chipmakers, cloud providers and AI companies.

The DOJ’s questions do not establish wrongdoing, and the investigation may not lead to legal action.

Why Nvidia's Hugging Face deal matters

Hugging Face operates a widely used platform where developers and researchers share and access AI models, datasets and software tools. Its platform connects developers, businesses and researchers working on artificial intelligence.

Nvidia, meanwhile, is best known for its graphics processing units (GPUs), which power many of the world's leading AI systems, including OpenAI's ChatGPT and Anthropic's Claude.

The acquisition could bring Nvidia closer to the developers who build AI applications, extending its reach beyond the hardware used to run them.

However, the DOJ is examining whether ownership of the platform could give Nvidia an advantage over competing chipmakers and AI providers. Officials have reportedly asked how the company might use the acquisition to harm rivals and have also sought information about Hugging Face's competitors.

One concern is whether developers would continue to have meaningful access to alternative hardware and cloud services if the deal goes through.

Nvidia has said Hugging Face would continue to work with a range of providers. The regulatory inquiry will examine potential competition risks, rather than establish that the company intends to restrict access.

DOJ examines Nvidia's other deals

The Hugging Face inquiry is part of a broader examination of Nvidia's business practices, according to Reuters.

The DOJ has also examined Nvidia's 2025 arrangement involving AI chip startup Groq, under which Nvidia licensed technology and hired engineers. Officials have explored whether Nvidia offered customers larger allocations of AI chips if they also purchased its networking equipment and Groq processors, Reuters reported.

Such practices can raise competition concerns if a company uses its strength in one market to gain an unfair advantage in another.

The department has also scrutinised Nvidia's acquisition of Run, which makes software that helps AI chips run more efficiently.

Another transaction under examination is Nvidia's December 2025 acquisition of SchedMD, the company behind open-source software used to manage workloads on high-performance computing systems. The software is also used in supercomputing systems relevant to national security.

Nvidia's position in the AI industry

Nvidia has benefited from growing demand for computing power as technology companies invest heavily in AI models and data centres.

However, rivals are working to reduce their dependence on Nvidia's hardware. Broadcom and Alphabet's Google are developing processors designed for specific computing tasks, while Advanced Micro Devices has pursued deals with AI laboratories and cloud computing companies.

The DOJ's scrutiny raises questions about whether Nvidia's expanding presence across hardware and software could make it harder for competitors to gain ground.

The broader examination began under former US President Joe Biden and has continued under President Donald Trump. Reuters reported that there was no indication Trump had personally intervened in the inquiry.