U.S. Inquiry Examines Nvidia’s $12.93 Billion Hugging Face Deal
Key Facts
The U.S. Justice Department has asked about the impact on AI competition of Nvidia’s proposed purchase of Hugging Face, valued at $12.93 billion, Reuters reported on Oct. 28, 2026, citing two people familiar with the matter. The questions focus on whether the acquisition would give the company a key distribution point for AI tools, the sources said. They also cover how the platform could be used to harm potential rivals and whether the acquired business would give Nvidia additional market influence. The deal has not closed and remains subject to regulatory approvals and customary closing conditions. Nvidia said it expects to complete it in the first half of 2027.
The inquiry puts Hugging Face at the center of a review concerning companies’ ability to access and distribute AI tools. The platform operates a community for developing, sharing and publishing open-source models, datasets and applications, according to an Nvidia filing. An Associated Press report estimated that more than 18 million developers, researchers and innovators use the platform. Its content includes more than 3 million models, 500,000 datasets and 1 million applications, according to the report. The AP attributed those figures to a post by Nvidia’s chief executive in September 2026, pointing to the breadth of the user base and tools that could be affected by how the platform is run after the deal.
Nvidia said in its filing that it is committed to keeping the platform open, allowing users to upload and download the models and datasets they choose. It added that the platform would continue to support other chip suppliers. The Associated Press reported that Hugging Face would continue to support development and deployment across multiple cloud providers and accelerators. That commitment intersects with regulators’ questions about whether Nvidia’s ownership of the platform would change access terms for AI tools or give the company influence over its rivals. The sources did not offer a final judgment on the effect of the commitments or the outcome of the department’s inquiries.
According to the company’s filing, Nvidia signed the definitive agreement on Sept. 2, 2026. The agreement includes about $11.9 billion payable to Hugging Face shareholders, subject to certain adjustments. It also includes a stock-based retention program worth up to about $1 billion for employees who join Nvidia. Reuters put the deal’s total value at $12.93 billion, the figure it cited in its report on the Justice Department’s inquiries. Nvidia said the expected closing in the first half of 2027 is conditional on customary closing conditions being met or waived, including required regulatory approvals.
The questions about the Hugging Face deal come as part of a broader review of Nvidia’s conduct, Reuters reported. Sources told the news agency that the department’s recent inquiries covered the company’s acquisitions, investments and sales practices, and whether it had pressured its customers. The broader examination began under former President Joe Biden and continued under President Donald Trump’s administration, according to the report. The report did not indicate that Trump was involved in the examination. Reuters also reported that the department had examined Nvidia’s acquisition of ShedMD, whose open-source software helps run supercomputers related to national security.
Nvidia’s purchase of ShedMD in December 2025 raised concerns among AI specialists about whether they would continue to have access to its open-source software, Reuters reported. That context brings Nvidia’s other deals into the department’s review, alongside questions about business practices and investments. But government inquiries alone do not establish wrongdoing, nor do they necessarily lead to lawsuits, according to the report. Reuters did not report that the department had announced formal charges in the matter. The Hugging Face deal remains at the proposed-agreement stage pending completion of the required conditions and approvals.
In trading, Nvidia shares rose 0.9% in the Tuesday, Oct. 27 session, amid a rally in AI stocks that lifted U.S. equities, according to the Associated Press. EL7 data showed the stock closing at $215.38 on Oct. 28. The available data do not link that close to the Justice Department’s inquiries, nor do they establish that the regulatory news caused the stock’s movement. The stock rose in the Oct. 27 session before the closing price for the following day was recorded. The market is watching the deal’s progress and regulatory approvals, while Nvidia is targeting completion in the first half of 2027.