U.S. inquiry into Nvidia’s $12.93 billion Hugging Face deal
Key Facts
The U.S. Justice Department is asking questions about Nvidia’s proposed $12.93 billion acquisition of Hugging Face as part of an inquiry into the deal’s effect on competition in the AI market, Reuters reported, citing people familiar with the matter. Officials asked whether the agreement would give Nvidia control over a key distribution channel for AI, according to the news agency. They also examined whether the platform could be used to disadvantage or gain influence over rivals. The questions also covered Hugging Face’s competitors. The report did not say that a final decision had been made or that any allegations concerning the deal had been publicly announced. Reuters said Nvidia did not comment and Hugging Face representatives did not respond to a request for comment.
The questions about Hugging Face are part of a broader Justice Department review of Nvidia’s conduct, Reuters reported. The review covers the company’s acquisitions, investments, sales practices and the possibility that it has pressured customers, the news agency said. The broader investigation began under former President Joe Biden and continued under President Donald Trump, according to the people familiar with the matter cited by Reuters. That places the platform deal within a wider review of the company’s market conduct, with published questions about the acquisition focused on the distribution channel and the possibility of harming competitors. A department spokesperson declined to comment on the matters before it, the report said.
Nvidia signed the definitive agreement on September 2, according to its September 3 filing with the U.S. Securities and Exchange Commission. The announced value of the deal is about $12.93 billion, while the company expects to complete it in the first half of 2027. Closing is subject to customary conditions, including obtaining the required regulatory approvals. The approval process therefore remains part of the announced timeline for the deal. The Reuters report did not set another closing date or say that the department had announced formal action against the agreement.
Nvidia describes the platform as bringing together more than 18 million developers, researchers and creators, who share more than 3 million models, 500,000 datasets and 1 million applications. The company said more than 200,000 businesses use Hugging Face to discover, evaluate, customize and deploy AI tools. These figures reflect the platform’s reach as a place where users and companies share models, data and applications. The department’s inquiry, as reported by Reuters, focuses on what Nvidia’s ownership of this channel could mean for competition and access to users and tools. Officials are also examining the identity of the platform’s competitors, according to the people cited by the news agency.
Nvidia said Hugging Face would continue to let users upload the models and datasets of their choice and would support other silicon suppliers. The company added that using its computing resources would not be a requirement for building or deploying applications through the platform. These commitments address the continuation of developer and hardware supplier options after the acquisition, while the department’s inquiry centers on whether ownership could give Nvidia influence over competitors or the distribution channel. The company’s filing cautions that government requirements relating to AI could restrict the models or datasets available through Hugging Face. Those requirements could necessitate changes to the platform or its practices, delay or restrict offerings, raise compliance costs, or lead to investigations and enforcement actions.
Nvidia’s closing share price fell to $217.2601 on October 28, from $217.94 in the previous session, according to EL7 data. This coincided with the publication of Reuters’ report on the department’s inquiry into the deal, but closing-price data alone do not establish the reason for the share move. Reuters said government investigations do not prove wrongdoing and do not necessarily lead to lawsuits. The expected closing date in the first half of 2027 remains conditional, according to Nvidia’s filing, on meeting the deal’s conditions and obtaining the required regulatory approvals. The report did not say whether the questions would lead to another formal step.