The U.S. Justice Department is investigating Nvidia’s $17 billion licensing agreement with AI chip startup Groq over potential antitrust concerns, examining whether the deal was structured to avoid traditional merger review. Nvidia shares closed at $223.67 on September 9, down 0.91%. The investigation adds regulatory risk as Nvidia expands its AI infrastructure role. The deal gave Nvidia a nonexclusive license to Groq’s inference technology and hired its founder Jonathan Ross and COO Sunny Madra. Groq remains independent under new CEO Simon Edwards. The DOJ sent Nvidia a formal request for information. A finding of wrongdoing could result in financial penalties.
The Justice Department opened its investigation shortly after the agreement was announced and sent Nvidia a formal request for information, as reported. Officials are examining whether the arrangement transferred technology, talent and resources in a way that should have triggered antitrust review similar to a traditional merger.
Nvidia spokesperson said in a statement: “The Groq story is a prime example of the American system working as designed to promote innovation, reward entrepreneurs, and benefit consumers.” The Federal Trade Commission’s director, Andrew Ferguson, told Bloomberg that the agency had started looking into whether these transactions were set up to evade regulatory inspection.
Senate Democrats Richard Blumenthal and Elizabeth Warren have demanded that the Justice Department and the FTC look into some of the transactions, including Nvidia’s collaboration with Groq. The case could affect how Nvidia and other AI companies structure future partnerships with startups.
Nvidia faces wider regulatory pressure. The company recently announced a $12.9 billion deal with AI platform Hugging Face, its largest ever. Groq still operates independently and plans to raise $350 million, including Nvidia as an investor. Groq was valued at around $7 billion.
The inquiry comes as competition in AI chips expands beyond Nvidia’s core graphics processors. Groq specializes in inference hardware for AI model output. The Department is expected to continue reviewing documents before deciding on enforcement, according to Reuters.
