U.S. Justice Department Asks About Nvidia’s $12.93 Billion Hugging Face Deal
Key Facts
U.S. Justice Department officials have asked about the impact on competition in artificial intelligence of Nvidia’s proposed $12.93 billion purchase of the Hugging Face platform, Reuters reported. The department is examining whether the acquisition would give the chipmaker control over a key distribution point in the market and whether it could harm competitors. The inquiries include, according to the report, Nvidia’s acquisitions, investments and sales practices, as well as whether it pressured customers. The review also covers how the platform might be used after its purchase to gain market influence or harm rivals. The questions place the deal within broader scrutiny of Nvidia’s expansion through companies and platforms linked to artificial intelligence.
Hugging Face plays a broad role in the AI development ecosystem; Nvidia’s chief executive said when announcing the deal that more than 18 million developers, researchers and creators use the platform to share more than 3 million models, 500,000 datasets and 1 million applications. Those figures provide context for the department’s questions about the platform’s position in distributing AI tools and making them available to developers. The questions focus, according to Reuters, on the possibility that the platform could become a means for Nvidia to exert influence over rivals or their access to users. Officials also examined whether Nvidia had offered larger allocations of AI chips to customers that buy networking equipment and Groq processors. The report says the department’s inquiries also covered Nvidia’s deal with Groq, alongside its review of the Hugging Face acquisition.
The Justice Department’s review is not limited to the proposed Hugging Face deal; it has expanded to include Nvidia’s purchase of SchedMD in December 2025. SchedMD develops open-source software used to run supercomputers relevant to national security. The purchase raised concerns among AI specialists about whether they would continue to have access to SchedMD’s open-source software, Reuters reported. The matter adds another dimension to the department’s questions about the impact of Nvidia’s expansion into infrastructure components on which the sector depends. The department said government investigations do not establish wrongdoing and do not necessarily lead to lawsuits.
Nvidia said the Hugging Face deal is expected to close in the first half of 2027, and that the platform will continue to support work with a range of chip, cloud computing and AI providers. The timeline sets out the expected closing date, while the department’s inquiries remain focused on the deal’s competitive impact and the company’s practices. The start of inquiries does not mean wrongdoing has been established or that litigation is inevitable, according to the Justice Department. In the market, Nvidia shares closed at $204.64 and Meta at $614.99 on October 30, 2026. Nvidia had closed at $216 on October 26, while Meta’s closing price fell from $630.56 on the same day to $614.99 on October 30.
In a separate matter, Republican Senator Marsha Blackburn objected to Meta’s updated commercial terms, which the company plans to implement. Blackburn sent Chief Executive Mark Zuckerberg a letter on October 23, 2026, expressing concern about the terms and what she described as broad authority to collect content from websites linked to business accounts. She said reports published on October 15 stated that the terms would allow automated crawlers to access, collect and analyze content from external websites. The plan raised concerns about its impact on businesses and creators, while Meta said the terms apply to its advertising and commercial products and do not change how it uses web crawlers. The company also said content owners still have the option to use a robots.txt file, and rejected claims by publishers and digital advertisers that the terms give it unlimited rights to use their content in AI services.
Meta postponed the implementation of its new commercial terms from October 30 to November 20, 2026, saying it wanted to allow time to address concerns from publishers and digital advertisers. Blackburn had said the changes could harm businesses and creators. The dispute comes as U.S. companies have increased election spending; their spending on House and Senate races reached $517 million in the 15 months through the end of the first quarter of 2026, exceeding the $461 million spent throughout the two-year 2024 election cycle. Reuters reported that Meta donated $65 million to four super PACs supporting candidates from both parties in state-level races. Political ad researchers estimated that spending on political ads in the 2026 midterm elections would reach $11.6 billion, exceeding the previous record of $11.2 billion in the 2023-2024 cycle.