Nvidia's $12.9 billion Hugging Face deal draws DOJ scrutiny - CNBC

Nvidia is facing questions from the U.S. Department of Justice concerning its acquisition of Hugging Face, an open-source platform for hosting and testing AI models, and how that deal may impact competitors in the field.

CNBC has confirmed the probe with a person familiar with the matter, who asked not to be named because they were not authorized to speak publicly. Reuters first reported the DOJ's inquiry on Wednesday.

Nvidia announced its nearly $13 billion acquisition of Hugging Face in September, and at the time, CEO Jensen Huang wrote that the deal would help "expand access to AI for developers and institutions worldwide."

Hugging Face already had massive adoption. At the time of the deal, Nvidia said in a press statement that more than 18 million people and more than 200,000 companies reportedly used Hugging Face to share at least 3 million models and 500,000 datasets.

Hugging Face also sells infrastructure and collaboration tools to organizations working with closed, proprietary AI including chip companies.

The Hugging Face acquisition marked Nvidia's second-biggest purchase, after it paid $20 billion for Groq assets at the end of last year, a deal that has also attracted DOJ scrutiny. The closest comparable to Hugging Face's business was GitHub, a software repository that was acquired by Microsoft in 2018 for $7.5 billion.

Hugging Face gained renewed recognition after reports that OpenAI agents attacked the platform during testing.

The company and that incident are part of a new, Netflix "insta-documentary" called "AI Gone Rogue."