The US Department of Justice has launched an antitrust review into whether Nvidia‘s planned $12.9 billion takeover of open-source platform Hugging Face will harm competition across artificial intelligence. Officials opened the Nvidia Hugging Face inquiry to determine if owning the repository gives the chipmaker control over vital AI software distribution channels.
Key points
- Antitrust regulators are questioning whether Nvidia’s purchase of Hugging Face creates an unfair chokepoint for competing AI hardware and software makers.
- Hugging Face hosts more than 3 million models and 500,000 datasets, serving over 18 million developers and 200,000 organisations worldwide.
- The review forms part of a wider federal examination into Nvidia’s acquisitions, chip allocation tactics, and sales practices across cloud computing.
- Nvidia agreed to the purchase in September and aims to close the transaction during the first half of 2027.
Antitrust enforcers examine distribution choke points
The Justice Department’s antitrust division has approached industry participants to examine how the takeover might alter access to open artificial intelligence models. Reuters first reported the inquiry, and CNBC confirmed that federal staff are asking market participants whether Nvidia could use Hugging Face to favour its own hardware and disadvantage rival chip designers.
Hugging Face serves as the primary hub for developers sharing machine learning models, datasets, and demonstration software. When Nvidia agreed to buy the company in September for $12.93 billion, the platform recorded 18 million registered users and hosted software for 200,000 businesses. Jensen Huang, Nvidia’s chief executive, said at the time of the announcement that the transaction would help “expand access to AI for developers and institutions worldwide.”
The transaction represents the largest purchase of a developer repository since Microsoft bought GitHub for $7.5 billion in 2018. Beyond serving as a code library, Hugging Face sells collaboration software and testing infrastructure to third-party tech firms, including companies building alternative processors. Antitrust officials want to know whether Nvidia could restrict access to those commercial services or gain visibility into competitors’ technical roadmaps.
Nvidia has rejected suggestions that it would close off the repository. The company said Hugging Face will continue to operate as an open platform that supports chips, cloud systems, and software frameworks from rival providers once the purchase completes in the first half of 2027. Hugging Face representatives did not respond to requests for comment.
A widening federal examination of Nvidia
The questions over Hugging Face come as the Justice Department deepens a broader, years-long investigation into Nvidia’s commercial conduct. Enforcers have examined whether the company penalised customers who buy artificial intelligence processors from competitors or allocated scarce graphics processing units based on customer loyalty.
Regulators are also assessing Nvidia’s package sales. Officials have asked if the company bundled its network equipment and specialised accelerators with its core graphics processors, using its market power in server chips to push into newer sectors. Nvidia declined to comment on the regulatory questioning.
The Hugging Face transaction is one of several corporate deals under scrutiny. At the end of last year, Nvidia agreed to a $20 billion deal to license technology and hire staff from AI chip startup Groq. That transaction, which marked Nvidia’s largest deal before Hugging Face, attracted Justice Department interest over whether Nvidia offered larger allocations of standard chips to customers who agreed to buy Groq hardware.
Investigators have similarly reviewed Nvidia’s purchase of SchedMD, a developer of supercomputing job-scheduling software acquired in December 2025. That deal prompted concerns from national security specialists who rely on open access to Slurm workload management code. The government also examined Nvidia’s purchase of Run:ai, an Israeli software company that helps data centres run AI processors more efficiently.
Hardware rivals push alternative architectures
Nvidia remains the dominant supplier of the graphic processors used to train and run large language models such as OpenAI’s GPT systems and Anthropic’s Claude. Its dominance has triggered a sustained push by rival semiconductor companies to capture market share.
Advanced Micro Devices has spent billions developing competing hardware and has secured supply deals with major cloud operators and independent AI research laboratories. At the same time, Alphabet’s Google and Broadcom continue to design custom tensor processing units, offering cloud clients an alternative to standard Nvidia servers.
By acquiring Hugging Face, Nvidia gains direct access to the software ecosystem where developers evaluate how models run across different silicon. Competitors fear that tools on the site could be tuned to work best on Nvidia architecture, sidelining rival hardware before developers write production software.
Hugging Face has faced operational pressures as its user base expanded. The platform was featured in a Netflix documentary titled AI Gone Rogue after reports that automated OpenAI systems interacted with the site during testing. Researchers have also tracked operational vulnerabilities across the repository, including incidents where malicious models on Hugging Face concealed software designed to mine cryptocurrency.
Political and legal scrutiny in Washington
The Justice Department’s examination of Nvidia began under President Joe Biden and has continued under President Donald Trump. While staff-led merger inquiries regularly span presidential terms, antitrust enforcement in AI has drawn political attention.
Jensen Huang has maintained ties with the Trump administration, joining the president on a diplomatic mission to China and receiving the National Medal of Science. Trump has publicly disclosed owning Nvidia shares and has praised American AI hardware companies.
A Justice Department spokesperson declined to discuss specific merger inquiries, citing department policy. The spokesperson said the department under Trump would continue to prioritise the development of superintelligence for the American public. The spokesperson added: “It would be inappropriate for the Department to conduct a merger investigation under the guise of a conduct investigation.”
Inquiries of this type do not necessarily result in a formal legal challenge. The Justice Department must gather documentary evidence and witness depositions to determine whether the merger creates a substantial lessening of competition under federal antitrust law. If enforcers find credible risks to market competition, the department could demand formal concessions, seek an asset sale, or sue in federal court to block the acquisition entirely.
