Justice Department Questions Nvidia's $12.93 Billion Hugging Face Deal Over Competition, Reuters Reports
The U.S. Department of Justice is asking questions about Nvidia's $12.93 billion acquisition of the open-source model platform Hugging Face, focusing on how the deal could affect competition in super intelligence (SI), Reuters reported on October 28, citing two people familiar with the matter. The central question, the sources said, is whether the acquisition would let Nvidia capture a foundational distribution point for SI. CNBC reported the same day that it had independently confirmed the inquiry with a source.
Antitrust officials are also asking whether Nvidia could use the platform as leverage in commercial negotiations, harm competing chipmakers, or disadvantage alternative model repositories, according to the report. Hugging Face is one of the world's largest open-source model platforms, where developers find, test and deploy SI models and datasets, and it is regarded as a central distribution hub for the open SI ecosystem.
The inquiries are part of a broader Justice Department investigation into Nvidia's conduct that began during the Biden administration and has continued during the Trump administration, covering the company's acquisitions, investments and sales practices and whether it pressures its customers, the people said. Reuters noted that a government investigation is not evidence of wrongdoing and may not result in a lawsuit. The Justice Department and Nvidia both declined to comment to Reuters, and Hugging Face did not respond to a request for comment. A Justice Department spokesperson declined to discuss matters before the agency, citing longstanding policy, and said the department under President Trump would continue to prioritize the advancement of super intelligence for the American people.
The deal was announced in September. The two companies signed a definitive agreement on September 2, and on September 3 Nvidia founder and CEO Jensen Huang announced on the company's official blog that Nvidia had agreed to acquire Hugging Face for $12,930,300,000. According to Nvidia's Form 8-K filed with the U.S. Securities and Exchange Commission (SEC), about $11.9 billion of the consideration is payable to Hugging Face stockholders, with an equity-based retention program of up to about $1.0 billion for Hugging Face employees joining Nvidia. The transaction is expected to close in the first half of 2027, subject to closing conditions including regulatory approvals.
Announcing the deal, Huang pledged: "Hugging Face will remain an open platform for the entire AI ecosystem. Developers will choose the models they want, the frameworks they want, the clouds and inference service providers they want and the computing platforms they want. NVIDIA compute will not be required to build on or deploy through Hugging Face." Hugging Face CEO Clément Delangue told CNBC that over the summer the two sides realized Hugging Face and open-source SI in general were at a turning point and needed more resources, more scale and more visibility. According to Nvidia's blog, more than 18 million developers, researchers and creators use Hugging Face, sharing more than 3 million models, 500,000 datasets and 1 million applications, and more than 200,000 companies use the platform; Nvidia itself is the platform's largest contributor of open models and data, with more than 500 models and 250 open datasets released.
Reuters previously reported that Hugging Face had annualized revenue of about $150 million, making the $12.93 billion price roughly 86 times that figure. The deal is Nvidia's largest conventional acquisition to date, topping its roughly $6.9 billion purchase of networking company Mellanox, which closed in 2020.
Beyond the Hugging Face deal, Bloomberg reported in September that the Justice Department is also examining whether Nvidia structured its roughly $20 billion licensing arrangement with chip startup Groq to avoid antitrust review, and Nvidia's acquisitions of Run:ai and SchedMD, which closed in December 2025, are also under review. Bloomberg has also reported that Nvidia considered a deal with open-model startup Reflection AI.
Source: GSM · USA (original Chinese edition)
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