DOJ Investigating Whether Nvidia Structured $17 Billion Groq Deal to Dodge Antitrust Review

Since Nvidia announced its licensing arrangement with Groq in December 2025, the deal has drawn regulatory attention that only became public this week. According to the New York Times, cited by Reuters and multiple outlets on September 9-10, the Justice Department opened an investigation into the arrangement shortly after it was announced and has since sent Nvidia a formal request for information.

The question at the center of the probe: did Nvidia structure the deal specifically to dodge antitrust review that a straight acquisition would have triggered?

What Nvidia Actually Did

Nvidia did not buy Groq. It took a non-exclusive license to Groq's inference chip technology and hired a group of the startup's executives, including founder Jonathan Ross, according to Reuters. A full acquisition has to be reported to federal regulators under the Hart-Scott-Rodino Act and can be blocked before it closes. A technology license followed by a hiring round doesn't trigger that same reporting requirement.

On paper, that's two ordinary transactions. Whether it functioned as something closer to a merger is what the Justice Department is trying to determine.

Nvidia's public defense is short and confident. "The Groq story is a prime example of the American system working as designed to promote innovation, reward entrepreneurs, and benefit consumers," a company spokesperson said, according to Reuters and the New York Times. Groq and the Justice Department did not immediately respond to requests for comment, Reuters reported.

The Number Problem

Outlets can't agree on what the deal is actually worth. Reuters, The News International and other outlets following the New York Times report put the figure at $17 billion. Bloomberg reported it as a $20 billion agreement. The Next Web has also cited a $20 billion figure in its own prior reporting. The discrepancy likely comes down to whether the number captures only the licensing payment or folds in the value of the executive hiring package, but none of the available reporting reconciles the two figures. Until Nvidia or the Justice Department clarifies it, the exact price tag on this deal is unsettled.

The Groq arrangement isn't a one-off. Nvidia used a similar structure with AI startup Poolside, paying $6 billion to license its model factory and hiring 109 of its staff, according to The Next Web. A single deal built this way can be argued as a legitimate licensing-and-hiring transaction. A repeated pattern across multiple AI startups is harder to wave off as coincidence, and that repetition is likely to matter more to investigators than any single transaction in isolation.

Before the deal, Groq was widely viewed as one of the most credible independent challengers in AI inference chips. It had raised money at a $3.5 billion valuation in a round Nvidia itself joined as an investor, according to The Next Web. After the deal closed, Groq lost its founder and a chunk of its senior engineering team. The company has since been raising $650 million to rebuild around the team and business that remain. A well-funded independent competitor in a critical AI chip category lost its leadership to the dominant player in the market, without a merger filing that would have let antitrust enforcers weigh in beforehand.

Nvidia's position isn't frivolous. The license is non-exclusive, meaning Groq's technology isn't locked up. Groq still exists as a company. Its remaining engineers are free to leave for competitors. All of that is true, and it's the core of Nvidia's legal argument that this was licensing and hiring, not a disguised acquisition.

The counterargument, which is what the Justice Department has to prove to make a case, is that a company can lose its ability to compete even if it technically still exists on paper. Antitrust law has traditionally focused on whether control of a company changed hands. A non-exclusive license doesn't transfer control in the legal sense. Investigators would have to show the arrangement functioned as a merger in substance, regardless of how it was papered.

The News International framed the deal as a possible "backdoor acquisition," a characterization that reflects that outlet's own analysis rather than a term used by the Justice Department or by Nvidia. No lawsuit has been filed. No charges have been brought. This is an open investigation with a formal information request, and according to the New York Times' reporting, regulators are considered unlikely to try to unwind the transaction even if they find wrongdoing. Fines are the more likely outcome if the Justice Department decides Nvidia crossed a line.

The Justice Department faces an unresolved question: whether antitrust law can treat a licensing-plus-hiring deal as functionally equivalent to a merger, something antitrust law wasn't originally built to capture. How that plays out with Groq could set the template for how AI chip consolidation gets policed going forward.