Nvidia’s $12.93 Billion Deal Faces Inquiry from U.S. Justice Department
Key Facts
The U.S. Justice Department is making inquiries about Nvidia’s purchase of Hugging Face, Reuters reported, citing sources, in a report whose details could not be verified. The inquiry comes as the proposed $12.93 billion deal remains subject to customary closing conditions. The available information contains no announcement of a final decision by the department or any publicly announced action concerning the deal. There is also no independent confirmation of the inquiry’s scope or motivations. The deal would put a widely used platform for models, data and applications under the ownership of a company that operates in chips and software, while regulatory approvals remain part of the conditions for completing it.
Nvidia announced on September 3, 2026, that it had agreed to acquire the company for $12.9303 billion. Its filing with the Securities and Exchange Commission lists two separate items: a purchase price of about $11.9 billion payable to shareholders, subject to certain adjustments, and an equity-based employee retention program of up to about $1 billion. The retention item therefore is not part of the purchase price payable to shareholders in the filing. Reuters reported the deal’s value at $12.93 billion in its report on the agreement. The available report does not specify a closing date or required approvals; the company’s filing expects completion in the first half of 2027, subject to customary closing conditions, including necessary regulatory approvals.
Nvidia says more than 18 million developers, researchers and creators use Hugging Face, and that the platform hosts more than 3 million models, 500,000 datasets and 1 million applications. The company added that more than 200,000 businesses use it to discover, evaluate, customize and deploy AI tools. These figures give the deal significance beyond the purchase of technology assets, as it concerns a platform where developers share models, data and applications. Reuters said the acquisition gives Nvidia direct access to an environment where developers collaborate, test tools and share them. The report added that this access could provide the company with insights and data to help narrow the technology gap with U.S. and Chinese labs.
Nvidia said Hugging Face would remain an open platform and that using its computing resources would not be a requirement for building or deploying applications on the platform. It also pledged to continue supporting development and deployment across multiple clouds and accelerators. The pledge means the company describes the continuation of developer choice and a multi-vendor infrastructure as part of the platform’s future after the acquisition. In its filing, Nvidia also said Hugging Face would support other silicon vendors. But the filing noted that government requirements could restrict the models or datasets available, require changes to the platform and its practices, or delay and constrain its offerings and increase compliance costs.
The deal comes as artificial intelligence, cybersecurity and regulatory oversight intersect in separate matters involving Nvidia and Hugging Face. On September 28, Nvidia announced software tools for AI agent safety that it said would have prevented a breach suffered by Hugging Face, according to a Reuters report. On September 30, Reuters cited a source as saying the U.S. Federal Trade Commission was conducting a broad AI inquiry following the Hugging Face incident and planned civil investigative demands for information from Anthropic, OpenAI and research group METR. On October 1, California’s Justice Department announced that its formal investigation concerned the Hugging Face incident and cybersecurity risks related to OpenAI and its models, then announced an investigative subpoena directed at OpenAI. These developments concern the platform incident or the sector; they do not announce an investigation into Nvidia’s acquisition of it.
The documented federal investigation in a separate matter concerns Nvidia’s agreement with Groq, not its purchase of Hugging Face. Reuters reported that the Justice Department is investigating whether the licensing arrangement, announced in December 2025 at a value of $17 billion, was designed to avoid scrutiny under antitrust laws. The agency said the department sent Nvidia a formal request for information in that investigation and could impose a fine if it concludes the company mishandled the deal. That matter is distinct from the inquiry Reuters reported concerning the Hugging Face purchase and does not establish that there is a formal investigation into the acquisition. According to Nvidia’s filing, completion of the deal remains expected in the first half of 2027, subject to closing conditions and required regulatory approvals.