NVIDIA’s $12.93 Billion Hugging Face Deal Draws U.S. Scrutiny
Key Facts
The U.S. Justice Department is asking about the impact of NVIDIA’s proposed $12.93 billion acquisition of Hugging Face on competition in artificial intelligence, according to a Reuters report cited by Investing.com, which quoted two people familiar with the matter. The report said department officials asked whether the deal would give NVIDIA a key position for distributing AI tools. The questions also addressed the possibility of using the platform to harm competitors or gain additional market influence. The department did not confirm details of the issues under review, Reuters reported. NVIDIA announced its agreement to acquire the company on September 3, 2026, with closing still subject to regulatory approvals and customary closing conditions.
The platform’s importance in this context stems from the size of its community and library, according to NVIDIA’s announcement. The company said more than 18 million developers, researchers and creators use Hugging Face to share more than 3 million models, 500,000 datasets and 1 million applications. The platform brings together tools and resources that developers use to build and deploy AI applications. These figures put access to the platform and its terms of use in the context of the deal. NVIDIA said the platform would remain open to users. It also said developers would be free to choose the models, frameworks, clouds, inference providers and computing platforms they want.
NVIDIA said use of its computing would not be required to build or deploy applications through Hugging Face. The company said it was committed to keeping the platform open so users could share the models and datasets of their choice. It also pledged to support other chip suppliers. The commitments come as department officials examine, according to the report, whether the deal would give NVIDIA influence over competitors or a key distribution point for AI tools. The official disclosure did not state how those commitments would affect the department’s review. The department has not announced a formal accusation in the matter, according to the information in the report.
Questions about the deal are part of a broader review of NVIDIA’s conduct, Reuters reported. The agency said the department’s inquiries covered the company’s acquisitions, investments and sales practices, as well as whether it had pressured customers. The broader review began under President Joe Biden and continued during President Donald Trump’s administration. The department also examined NVIDIA’s acquisition of SchedMD, which provides open-source software for operating supercomputers, according to the report. The company’s purchase in December 2025 raised concerns among AI specialists about their continued access to the software. Reuters said government investigations do not establish wrongdoing and do not necessarily lead to lawsuits.
According to NVIDIA’s disclosure to the U.S. Securities and Exchange Commission, the purchase consideration due to Hugging Face shareholders is about $11.9 billion before certain adjustments. The agreement also includes a stock-based retention program worth up to about $1 billion for employees who join NVIDIA. The company had announced that the total acquisition value was $12,930,300,000. It said the deal is expected to close in the first half of 2027, subject to the satisfaction or waiver of customary closing conditions. Those conditions include obtaining required regulatory approvals. The expected timing therefore remains tied to the approval process and the terms of the agreement.
In the market, NVIDIA shares rose 0.9% in the Tuesday, October 27, 2026, session, according to the Associated Press, which said AI stocks led Wall Street higher that day. The S&P 500 rose 0.6% and the Nasdaq gained 1.2% on the same day. NVIDIA closed at $215.38 on October 28, according to EL7 data. These figures record moves in the stock and indexes on two consecutive dates, without the sources linking the session’s gains to the department’s inquiries. The next expected step for the deal remains completion of the closing conditions and regulatory approvals, with NVIDIA targeting a close in the first half of 2027.