Justice Department Questions Nvidia's $12.9 Billion Hugging Face Deal

October 29, 2026 · Category: Business & Tech

Nvidia (NASDAQ: NVDA) is facing questions from the U.S. Department of Justice about its planned $12.9 billion purchase of Hugging Face, CNBC confirmed on Wednesday after Reuters first reported the inquiry. According to Reuters, via U.S. News, investigators want to know whether the deal could give Nvidia control of a key channel for distributing AI models and hurt rivals. The questions are part of a broader, longer-running antitrust look at Nvidia's acquisitions, investments and sales practices. Nvidia, which expects the deal to close in the first half of 2027, declined to comment to CNBC.

Hugging Face matters because so much of the AI industry runs through it. When the deal was announced in September, Nvidia said more than 18 million people and over 200,000 companies used the platform to share at least 3 million models and 500,000 datasets, CNBC reported. It also sells infrastructure and collaboration tools to companies building proprietary AI, including chipmakers that compete with Nvidia. That is where the antitrust concern comes from: the company that sells most of the chips used to train AI models would also own the main place where many of those models are published and tested.

The deal would be Nvidia's second-largest, after the $20 billion it paid for Groq assets late last year, which CNBC said has also drawn Justice Department scrutiny. An inquiry is not a lawsuit, and it does not block the deal. It does mean the closing timeline and any conditions are now less certain.

The timing fits a week in which AI deals have kept getting bigger. On Monday, Bank of America, Blackstone, Citi and Morgan Stanley announced a $63 billion special purpose vehicle that will buy Broadcom (NASDAQ: AVGO) AI accelerators and networking gear and lease them to Anthropic, with deliveries expected to start in 2027, according to the companies' announcement. Broadcom is providing residual value support to lenders, which Reuters described as effectively a significant guarantee, in a report carried by Investing.com. As chipmakers take on more roles as lenders, investors and now platform owners, regulators are paying closer attention.

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Tickers: NASDAQ:NVDA, NASDAQ:AVGO

Why it matters

The Hugging Face inquiry tests how far the leading AI chip supplier can expand into the software layer above its hardware. A drawn-out review could slow the deal or bring conditions on how the platform is run. This is reporting only, not investment advice.

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