Nvidia Faces DOJ Scrutiny Over $20 Billion Groq Licensing Deal

The Justice Department is examining whether Nvidia structured its licensing agreement with AI chip startup Groq specifically to avoid the kind of antitrust review a traditional acquisition would trigger, according to two people familiar with the matter cited by The New York Times. The scrutiny lands at a moment when Nvidia already commands an outsized share of the AI hardware market, making any deal that could extend its reach a natural target for regulators. Reuters, which first reported on the Times’ story, said it could not independently verify the details.

The arrangement in question is no small transaction. Nvidia and Groq announced a licensing deal worth roughly 20 billion dollars in December, the largest deal Nvidia has made to date, and it is not the company’s first move of this kind. In September 2025, Nvidia licensed technology from chip interconnect startup Enfabrica in a similar structure, a pattern that has drawn the label “reverse acquihire” from critics who argue it lets a dominant player absorb a rival’s technology and talent while leaving the smaller company technically independent.

What happens next will depend heavily on what DOJ investigators find, but the probe is already part of a broader pattern of regulatory attention on Nvidia, whose graphics processors underpin most large-scale AI development worldwide. Congressional Democrats have separately pressed the company on the same deal, and the DOJ has reportedly been looking at Nvidia’s chip access practices on a different track since last year.

What the DOJ is reportedly investigating #

According to the Times’ sourcing, investigators are focused on whether Nvidia designed the Groq licensing agreement to functionally acquire the startup’s technology and expertise without triggering the merger review process that a formal purchase would require. That distinction matters under U.S. antitrust law: transactions structured as licenses, partnerships, or partial-interest deals do not automatically face the same scrutiny as outright acquisitions, even when their competitive effect is similar.

Why the structure matters

A licensing deal grants one company rights to use another’s technology without transferring ownership of the underlying business. Regulators have signaled they intend to look past that formal distinction. The Federal Trade Commission’s 2023 merger guidelines note that partial-interest acquisitions, exclusive dealing arrangements, and non-equity partnerships can raise the same competitive concerns as a full merger if they have the effect of eliminating a rival.

Congressional pressure preceded the DOJ report #

Senators Elizabeth Warren and Richard Blumenthal opened their own inquiry into the Groq deal last month, writing to Nvidia CEO Jensen Huang to ask whether the arrangement was designed to sidestep antitrust law. The senators argued that the deal could deepen Nvidia’s dominance in AI chips at a moment when they believe the United States needs more, not less, competition in the sector.

Their letter cited figures showing Nvidia controlling roughly 90 percent of the high-end data center GPU market and about 92 percent of the PC GPU market as of the third quarter of 2025. The senators also noted that the FTC and DOJ retain authority to review reverse acquihire structures even when they fall short of a formal merger, and they urged both agencies to open an investigation.

A deal with industry-wide ripple effects

The Groq agreement has already shaped decisions elsewhere in the AI industry. OpenAI had reportedly been evaluating Groq’s inference chips as a potentially more efficient alternative to Nvidia’s hardware for certain workloads, but those talks were shut down once the Nvidia-Groq licensing deal was announced, underscoring how the arrangement affects competition beyond the two companies directly involved.

Part of a wider antitrust pattern around Nvidia #

The Groq matter is not Nvidia’s only current entanglement with antitrust authorities. The DOJ has been separately investigating the company over whether it conditioned access to scarce H100 GPUs on exclusive cloud service agreements, a practice that would raise its own monopolization concerns independent of the Groq deal. Nvidia has also faced antitrust inquiries from regulators in the European Union and the United Kingdom in recent years.

How the Groq deal compares to Nvidia’s earlier licensing moves

Nvidia has not publicly commented on the DOJ report, and the company has not previously disputed the terms of the Groq deal as described by lawmakers. The investigation is still in its early stages, and it remains unclear whether it will lead to formal enforcement action.