U.S. antitrust authorities are examining the structure of Nvidia’s recent agreement with AI chipmaker Groq to determine if it was designed to avoid formal regulatory review, The New York Times reported, citing two people familiar with the inquiry. The probe commenced soon after Nvidia disclosed the arrangement in December, and the Justice Department has since issued a formal demand for information to Nvidia, according to the report.
The focus of the investigation is an arrangement Groq described as a nonexclusive license that granted Nvidia access to Groq’s custom chips, which are engineered for AI inference tasks. That licensing component was paired with the departure of Groq’s chief executive, Jonathan Ross, and chief operating officer, Sunny Madra, who subsequently joined Nvidia as part of the overall deal structure.
According to the reporting, the Justice Department could impose fines if it finds that the companies violated antitrust laws. At the same time, officials do not presently expect the deal to be unwound, and the inquiry may close without any enforcement action. The probe is ongoing and its outcome remains uncertain.
Regulators are paying close attention to industry agreements that combine technology transfers with the hiring of key personnel rather than proceeding through outright acquisitions. The case underscores a growing regulatory emphasis on deals that can provide larger technology firms with access to critical talent and intellectual property without triggering the automatic reviews associated with traditional mergers and acquisitions.
Groq has retained its independent status following the agreement and continues to market cloud-computing services. In August, the company announced plans to raise $350 million in new capital, with Nvidia planning to participate in that funding round, a detail the report noted as illustrative of the atypical nature of the relationship between the two companies.
Nvidia has defended the agreement, according to the report. The probe arrives against the backdrop of Nvidia’s outsized position in the AI chip market. The New York Times cited the company’s market value at about $5.4 trillion and said Nvidia has increasingly leveraged its financial resources to invest in AI startups and to support customers across the sector.
Groq was valued at approximately $7 billion prior to the deal with Nvidia, according to PitchBook, and counted investors such as Samsung, BlackRock and 1789 Capital among its backers. Those valuation and investor details were included in the reporting and provide context for the commercial and financial relationships at play.
Impacted sectors: semiconductor and AI hardware providers, cloud-computing services, and broader technology investment activity.