Nvidia Faces Justice Department Inquiry Over Hugging Face Acquisition and Sales Practices

The U.S. Department of Justice is making inquiries into Nvidia's proposed $12.93 billion acquisition of Hugging Face, according to sources familiar with the matter. Reported questions cover the acquisition itself, along with Nvidia's broader acquisitions, investments, and sales practices.

Hugging Face functions as a distribution and discovery layer between model creators and the hardware used to run them, serving as a platform where developers discover, test, share, and deploy artificial intelligence models and datasets. Because Nvidia is a leading supplier of AI chips, regulators are examining whether owning both could allow the company to steer developers toward its own products or disadvantage competing hardware and cloud providers.

According to the reported inquiries, investigators are also looking into whether Nvidia tied chip access to purchases of networking products or other technologies. These allegations remain under investigation and unproven. The examination is part of a broader, years-long Department of Justice investigation into Nvidia's conduct across acquisitions, investments, and sales strategies.

Nvidia announced the transaction in September 2026, with an expected close in the first half of 2027, subject to regulatory review and other conditions. The deal allocates approximately $11.9 billion to existing investors, alongside a separate retention program worth up to $1 billion targeting employees who join Nvidia. Nvidia has committed to keeping the platform open and stated that Hugging Face will continue supporting a range of chip, cloud, and AI providers after the acquisition closes, though the company declined to comment on the reported inquiry.

Meanwhile, Nvidia faces ongoing supply constraints affecting its consumer graphics hardware. The 16GB GeForce RTX 5080 and RTX 5090 models have disappeared from Nvidia's storefront, with prices for existing stock climbing past $2,000 amid persistent memory supply shortages reported by DRAM manufacturers such as Samsung, SK Hynix, and Micron.

Industry reports suggest Nvidia is preparing to replace the 16GB RTX 5080 with a 24GB version as early as December 2026 or January 2027, aligning with the CES showcase. While the new model would feature a 50% upgrade in VRAM, it is expected to carry an elevated price tag due to ongoing DRAM supply constraints projected to persist through the decade.

Addressing the hardware availability, Nvidia stated that the "RTX 5080 is still available but may be out of stock in some regions," adding that supply constraints are currently affecting inventory.