Nvidia under DOJ investigation over Groq licensing deal

The U.S. Department of Justice (DOJ) has launched an investigation into Nvidia to determine if the company structured its licensing agreement with AI chip startup Groq to bypass mandatory antitrust reviews. The inquiry follows a December deal valued between $17 billion and $20 billion, in which Nvidia secured a non-exclusive license for Groq’s Language Processing Units (LPUs) and hired several key executives, including founder Jonathan Ross and COO Sunny Madra.

Investigators are utilizing a Civil Investigative Demand to examine whether this arrangement—often referred to as an ‘acqui-hire’—functioned as a de facto merger. While Groq remains an independent entity under new leadership, regulators are scrutinizing whether the combination of technology licensing and the loss of core personnel effectively transferred control or diminished Groq’s ability to compete.

A spokesperson for Nvidia defended the transaction, stating the deal is a prime example of a system that rewards innovation and entrepreneurs. While the DOJ could potentially seek fines if wrongdoing is discovered, experts suggest that forcing the company to unwind the deal is unlikely.