The inquiries form part of a broader Justice Department investigation into Nvidia’s business practices, including its acquisitions, investments, sales strategies and potential pressure on customers, according to the sources, Reuters reported.
Officials have asked whether acquiring Hugging Face would give Nvidia control over a key distribution platform for AI, potentially strengthening its position against competitors, the sources said.
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Nvidia has said the deal is expected to close in the first half of 2027. The company has also pledged that Hugging Face would continue supporting a range of chipmakers, cloud providers and AI developers.
The Justice Department’s broader examination began under former President Joe Biden and has continued under President Donald Trump. The investigation does not necessarily mean the department will take legal action, and there is no indication that Trump has been involved in the probe.
A Justice Department spokesperson declined to comment on specific matters before the agency. Nvidia also declined to comment, while Hugging Face representatives did not respond to a request for comment.
The department has also examined other Nvidia transactions, including its acquisition of SchedMD in December 2025. The company develops open-source software used to manage high-performance computing systems, including supercomputers. The purchase raised concerns among some AI specialists about continued access to the software, although Nvidia has pledged to maintain open access and support.
Investigators have also scrutinized Nvidia’s 2025 agreement to license technology from chip startup Groq and hire its engineers, according to the sources. Officials have explored whether Nvidia offered customers larger allocations of its AI chips in exchange for purchases of its networking equipment and Groq processors.
The department has separately examined Nvidia’s acquisition of Run:ai, a company whose software helps improve the efficiency of AI chip usage, the sources said.
The Hugging Face inquiry includes questions about whether Nvidia could use the platform to disadvantage rival AI companies or gain additional leverage in the market. Investigators are also asking about Hugging Face’s competitors, according to the sources.
Nvidia has become a central player in the AI industry through its processors, which power data centers and systems used by companies including OpenAI and Anthropic. Its market position has also attracted competition from chip developers such as Advanced Micro Devices and Broadcom, as well as Google, which designs its own AI processors.
Any enforcement action could have implications for Nvidia’s acquisition and investment strategy as regulators assess competition in the rapidly expanding AI sector. However, government investigations are not evidence of wrongdoing and do not necessarily lead to lawsuits.
