The U.S. Justice Department’s antitrust division has opened an investigation into Nvidia’s licensing agreement with the AI chip company Groq, examining whether the deal’s structure was designed to avoid a required merger review. The New York Times first reported the inquiry on September 9, and Reuters and The Register followed with additional detail.
The agreement, valued at roughly $17 billion to $20 billion, has drawn scrutiny because it was structured as a license rather than an acquisition. Antitrust enforcers suspect the arrangement may have been shaped to sidestep the pre-merger notification requirements of the Hart-Scott-Rodino Act, according to the reports.
The Hart-Scott-Rodino Act requires parties to a deal above a certain size to notify the antitrust agencies and observe a waiting period before closing. The threshold is adjusted annually and now runs into the hundreds of millions of dollars. A transaction in the tens of billions would sit far above it, which is why the first question for the government is whether the Groq arrangement is a merger at all.
Nvidia’s own securities filings describe a deal that looks, in economic terms, like a purchase. The company paid $13 billion at closing, with another $4 billion, including imputed interest, due within a year. Nvidia also recorded $14.4 billion in goodwill and $2.5 billion in developed technology intangibles tied to the transaction.
The agreement went further than technology. It brought over multiple Groq executives, including founder Jonathan Ross, a feature that regulators and lawmakers have come to describe as a “reverse merger” in which talent and assets move together without a formal acquisition.
Groq, founded by a group of former Google engineers including Ross, built chips designed for fast inference, the process of running an already-trained model rather than training a new one. The company positioned itself as a challenger to Nvidia in a market Nvidia dominates, and its independent voice in that market is part of what the arrangement is accused of removing.
The structure matters because Hart-Scott-Rodino requires pre-closing review for transactions above a size threshold, with substantial penalties for parties that skip it. If the license agreement amounts to an acquisition in substance, the Justice Department could argue that the notification rules apply.
The Groq deal is one of several such arrangements now under political pressure. Senators Elizabeth Warren and Richard Blumenthal have jointly called for a review of “reverse merger hiring” structures, naming three transactions: Nvidia-Groq, Meta-Scale AI, and Google-Windsurf.
The senators’ concern is that technology companies are using licensing and hiring agreements to absorb rivals without triggering the review that a conventional merger would require. The pattern, they argue, lets dominant firms consolidate talent and technology while antitrust enforcers stand outside the door.
Nvidia has defended the transaction. The company said the deal is “a model of the American system working as designed,” casting the licensing arrangement as a routine business decision that brought Groq’s technology into Nvidia’s ecosystem.
The case lands at a delicate moment for Nvidia. The company’s grip on the market for AI accelerator chips has made it a target for regulators on both sides of the Atlantic, and it has faced antitrust attention as its valuation has climbed. The company has repeatedly argued that its success reflects the quality of its products rather than exclusionary conduct.
The investigation does not yet mean the government will act. The Justice Department would need to establish that the deal crossed a line under the merger rules, a question that turns on fine points of law and on how the agencies interpret licensing arrangements in the AI sector.
The inquiry’s significance extends beyond one company. If licensing-and-hiring deals can substitute for acquisitions without triggering merger review, then a generation of antitrust rules built around share purchases and asset transfers no longer covers the ways dominant firms actually absorb competitors. That is the question the senators’ letter, and now the Justice Department’s investigation, is forcing the industry to confront.
The scrutiny of licensing deals is new territory for the agencies. Merger review has long turned on whether a deal transfers control of assets or voting securities. A license paired with hiring sits awkwardly inside that framework, which may be exactly why the structures have multiplied.
For the AI industry, the inquiry raises a broader question about how the current wave of consolidation will be policed. The sector is consolidating rapidly through a mix of acquisitions, licenses, and hiring arrangements, and the agencies are still deciding which of those forms the law should treat as a merger.
What the inquiry signals is a widening of the antitrust lens. After years of focusing on whether big technology companies acquired rivals, enforcers are now asking whether the industry has found new legal forms that achieve the same result, and whether the rules written decades ago still capture them.
