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

The U.S. Department of Justice has opened an inquiry into Nvidia's acquisition of Hugging Face, a platform used by developers to host and test artificial intelligence models. The probe focuses on how the transaction might affect rivals in the AI industry. CNBC confirmed the investigation with a source familiar with the matter, following an initial report by Reuters on Wednesday.

Nvidia announced the deal in September 2026 with a valuation of nearly $13 billion. CEO Jensen Huang stated at the time that the purchase would help expand access to AI for developers and institutions worldwide. Hugging Face was already a major hub for the sector when the contract was signed. Nvidia noted that more than 18 million people and over 200,000 companies used the service to share at least 3 million models and 500,000 datasets.

The inquiry may examine Nvidia's role in providing infrastructure and collaboration tools to organizations that work with closed, proprietary AI systems, including chip companies. This aspect of the business is potentially relevant to competition concerns. The purchase stands as the second-largest in Nvidia's history, trailing only a $20 billion payment for Groq assets at the end of 2025. That earlier transaction has also drawn regulatory scrutiny.

Analysts often compare Hugging Face to GitHub, a software repository that Microsoft acquired in 2018 for $7.5 billion. Hugging Face recently gained additional public attention after reports indicated that OpenAI agents attacked the platform during testing. The company and that incident are featured in a new Netflix insta-documentary called AI Gone Rogue. Nvidia has declined to comment on the current DOJ inquiry.