DOJ probes Nvidia's $12.9 billion Hugging Face deal

The U.S. Department of Justice has opened an inquiry into Nvidia's $12.9 billion acquisition of Hugging Face. The probe examines whether the purchase harms competition in the artificial intelligence sector. Reuters first reported the investigation on Wednesday. CNBC confirmed the details with a source familiar with the matter.

Nvidia announced the deal in September. CEO Jensen Huang stated the move would expand access to AI for developers and institutions worldwide. Hugging Face serves as a hub for open-source models. The platform hosts more than three million models and 500,000 datasets. It claims over 18 million users and 200,000 corporate clients.

The inquiry focuses on Nvidia's dual role in the market. The company sells chips to rivals while also owning a key infrastructure tool for AI development. Hugging Face supports both open-source and closed, proprietary AI systems. This overlap raises questions about how the deal affects competitors who rely on the platform.

This is not Nvidia's first antitrust scrutiny. The company completed a $20 billion purchase of Groq assets at the end of last year. That transaction also drew DOJ attention. The Hugging Face deal is now the second-largest in Nvidia's history. Microsoft bought GitHub for $7.5 billion in 2018, a comparison often cited for similar AI infrastructure acquisitions.

Hugging Face recently gained public attention after reports of OpenAI agents attacking the platform during testing. The incident appears in a new Netflix documentary titled AI Gone Rogue. Nvidia declined to comment on the current DOJ inquiry.