US Justice Department Investigates Nvidia's Licensing Deal with Groq

The US Justice Department is investigating whether Nvidia attempted to avoid antitrust scrutiny regarding a licensing deal it made with AI chipmaker Groq last year. The inquiry focuses on whether the arrangement functioned as a de facto merger to consolidate talent and resources while bypassing the automatic government reviews typically required for traditional acquisitions. As part of the deal, Groq CEO Jonathan Ross and COO Sunny Madra joined Nvidia, while Nvidia gained access to Groq's custom AI chips.

The Justice Department sent Nvidia a formal demand for information shortly after the deal was announced in December. Sources indicate that if the agency finds fault, it may fine the company, though it would likely not require the deal to be undone. A spokesperson for Nvidia stated that the arrangement promotes innovation and rewards entrepreneurs. A Justice Department spokesperson declined to comment on the specific matter but affirmed that the agency under President Trump will prioritize affordability across the economy.

This investigation follows calls from Senate Democrats, including Elizabeth Warren and Richard Blumenthal, for the FTC and Justice Department to examine such deals. Andrew Ferguson of the FTC also indicated in January that the agency was examining whether these structures were designed to evade regulatory oversight. Meanwhile, Groq continues to operate and recently announced a funding round of 350 million dollars in which Nvidia planned to participate.