U.S. antitrust authorities are taking a critical look at the agreement between Nvidia and AI chip company Groq. They are investigating whether the companies used their licensing arrangement to avoid a formal review of the deal.
The U.S. Department of Justice (DOJ) is investigating the $20 billion agreement, Bloomberg reports, citing sources familiar with the matter. Nvidia gained access to Groq’s technology late last year. At the same time, CEO Jonathan Ross and COO Sunny Madra made the switch to Nvidia.
Groq formally remained an independent company. It is precisely this combination that is relevant to the investigation. The transaction was not filed for a competition review, even though Nvidia acquired not only technology but also two key Groq executives. U.S. lawmakers previously described the arrangement as a de facto acquisition that could restrict competition.
Licenses under scrutiny
The case fits into the growing focus by U.S. regulators on agreements in which large technology companies license technology while simultaneously acquiring personnel from startups. This allows them to capture a large portion of a young company’s value without formally acquiring the company itself.
Amazon, Microsoft, and Google have also used similar arrangements to acquire technology and specialized AI teams. Regulators are investigating to what extent existing antitrust rules can be applied to such transactions.
Moreover, the investigation into Nvidia is not an isolated case. According to Bloomberg, the DOJ has been looking into possible violations of antitrust rules by the chip manufacturer since 2024. The questions surrounding the Groq agreement reportedly became part of that broader investigation earlier this year.
Possible fine
Groq develops processors for AI inference, the execution of pre-trained AI models. In doing so, the company operates in a market where Nvidia is seeking to further expand its position beyond its dominant GPU platform.
Nvidia argues that the agreement actually demonstrates that the U.S. system encourages innovation and entrepreneurship. Neither the DOJ nor Groq provided Bloomberg with a substantive response regarding the investigation.
It is not yet certain that the case will lead to any action. However, if the DOJ concludes that the Groq deal should have been filed for a competition review in advance, it may seek civil penalties.