US antitrust regulators are closely examining Nvidia's planned acquisition of the open-source platform Hugging Face. According to sources cited by Reuters, officials at the US Justice Department are assessing whether the deal could grant Nvidia excessive control over a critical hub for AI distribution, potentially harming competitors. Valued at $12.93 billion, the transaction is expected to close in the first half of 2027. Nvidia maintains that Hugging Face will continue to support partnerships with various chip, cloud, and AI providers following the acquisition.
Simultaneously, regulators are investigating a wider range of Nvidia's activities, including its acquisitions, investments, sales practices, and potential pressure on customers. This probe, which began under President Joe Biden, has continued under Donald Trump. Officials have specifically reviewed Nvidia's purchases of SchedMD and Run:ai, as well as its licensing agreement with Groq. The investigation also includes inquiries into whether Nvidia incentivized customers to purchase more AI chips by requiring them to buy Nvidia networking equipment and Groq processors.
Nvidia is facing similar scrutiny in Europe, where France's competition authority is investigating the company for alleged anticompetitive business practices. French regulators are concerned about the industry's reliance on Nvidia's CUDA programming software and the company's stakes in cloud providers such as CoreWeave. The authority has highlighted potential risks including supply restrictions, unfair contract terms, and discrimination against specific customers.
Sources: The Decoder.