DOJ investigates whether Nvidia structured its Groq deal to avoid merger review
The New York Times reported Wednesday that the Justice Department has examined Nvidia's Groq license-and-hire since December 2025 and sent a formal demand for information; Reuters put the deal at $17 billion.
The Justice Department has been investigating since December whether Nvidia's licensing deal with Groq was built to skip the merger review a straight acquisition would have faced, the New York Times reported Wednesday, citing people familiar with the matter. Investigators have already sent the chipmaker a formal demand for information.
Microsoft, Amazon, Google, and Meta have used the same license-and-hire template on AI startups since 2024, in deals that climbed from Microsoft's $650 million Inflection arrangement to Meta's $14.8 billion Scale AI stake.
Reuters later quoted an Nvidia spokesperson: "The Groq story is a prime example of the American system working as designed to promote innovation, reward entrepreneurs, and benefit consumers." Groq and the Justice Department did not immediately comment outside regular hours.
What Nvidia took from Groq
On Wednesday, December 24, 2025, Groq said it had entered a "non-exclusive licensing agreement with Nvidia for Groq's inference technology." Founder Jonathan Ross, president Sunny Madra, and other team members would join Nvidia. Groq would remain an independent company under Simon Edwards, and GroqCloud would keep running without interruption.
Neither company put a price on the announcement. Reuters, in its account of the Times report, put the deal at $17 billion. CNBC, citing Alex Davis, chief executive of Disruptive, Groq's lead investor, reported in December that Nvidia had agreed to pay about $20 billion in cash for Groq assets other than the cloud unit, and described the transaction as Nvidia's largest purchase on record. Bloomberg, writing on the investigation, used the same $20 billion figure. Neither company has confirmed the price.
Nvidia chief executive Jensen Huang drew the legal line in an email to staff. "While we are adding talented employees to our ranks and licensing Groq's IP, we are not acquiring Groq as a company." He said Nvidia planned to fold Groq's low-latency processors into its AI-factory architecture for inference and real-time workloads.
The form is the point. A classic stock purchase above the Hart-Scott-Rodino thresholds, the U.S. premerger notification rules that force qualifying deals to pause for review, would have to be filed with the Federal Trade Commission and the Justice Department. A non-exclusive license plus a wave of hires often is not. Groq's release did not mention an HSR filing. Whether one was made has not been established.
The question investigators are asking
The Times' sources said the department opened the Groq inquiry shortly after the December announcement and that the agency may fine Nvidia if it finds fault with how the deal was handled, but would probably not require the arrangement to be undone. That is a process story with a bounded outer edge, not a reported plan to break up Nvidia or to put Groq back together.
Senators Elizabeth Warren of Massachusetts and Richard Blumenthal of Connecticut put the same theory on paper on March 19. In a letter to Huang they wrote that by licensing Groq's technology and hiring its most important employees, Nvidia had "effectively acquired Groq in all but name," and they asked whether the structure was an attempt to avoid antitrust review. The Justice Department, according to the Times, had opened its file three months earlier.
This Groq inquiry sits beside a separate, earlier Nvidia matter. In August 2024, Reuters reported a Justice Department investigation into the company's AI-chip sales practices, including alleged pressure on cloud buyers and higher networking prices for customers using rival chips. On September 4, 2024, Nvidia said it had asked the department and "have not been subpoenaed," and that it was "happy to answer any questions regulators may have about our business." That episode was about how Nvidia sells GPUs. This one is about how it took in a competitor's people and intellectual property.
Nvidia had already used the template
In September 2025, three months before Groq, Nvidia licensed the interconnect technology of chip startup Enfabrica and hired its chief executive, Rochan Sankar, for more than $900 million, CNBC reported. The Warren-Blumenthal letter cited that deal.
Microsoft paid Inflection about $650 million in 2024 for a licensing arrangement while hiring its top talent, Reuters reported; the FTC later examined whether that package was designed to skirt merger-disclosure rules. The UK Competition and Markets Authority designated the Inflection hiring and related agreements a merger, then cleared it on September 4, 2024. On July 16, Brazil's Administrative Council for Economic Defense, CADE, cleared the same arrangement without restrictions and called it a reverse acqui-hire: a hire-and-license that functions like a purchase of the business without a purchase of the equity.
Amazon's 2024 hiring of Adept executives and researchers, paired with a technology license, drew an informal FTC inquiry, Reuters reported that July, citing a person familiar with the matter. Google's August 2024 non-exclusive license from Character.AI, as co-founders Noam Shazeer and Daniel De Freitas rejoined Google, led the Justice Department to examine whether the agreement was structured to avoid formal merger scrutiny, Fortune reported in May 2025; the inquiry was described as early, and Google had not been accused of wrongdoing. Meta's June 2025 Scale AI investment, a 49% nonvoting stake Reuters valued at $14.8 billion, with founder Alexandr Wang moving to Meta, drew criticism as a near-control position that can sit below a filing trigger.
The only reviews that have actually concluded are the UK and Brazilian Inflection decisions. No U.S. agency has issued a finished decision on any of these deals.
Where Nvidia sits in the funds that hold it
Nvidia is a $5.42 trillion company. It is 8.3% of the S&P 500 SPY as of Wednesday and 22.6% of VanEck's semiconductor fund SMH; iShares' capped semiconductor fund SOXX held 9.9% as of Monday.
Nvidia shares finished Wednesday at $223.67, down 0.91%, a move that predates the Times report. Extended-hours quotes through about 8 p.m. Eastern were little changed. For a holder, the honest reading is little, yet. Groq still describes itself as independent. The Times' sources say a forced undo is unlikely. The live issue is not whether Nvidia is about to lose Groq's technology. It is whether the license-and-hire template that moved that technology, and that has moved other AI startups into larger firms without a merger filing, still works now that the Justice Department has put Nvidia's version on the record.
Frequently asked
What is the Justice Department actually investigating?
Whether Nvidia's license-and-hire deal with Groq was structured to skip the merger review a straight acquisition would have triggered.
Did Nvidia buy Groq?
No: Nvidia licensed Groq's inference technology non-exclusively and hired founder Jonathan Ross and other staff, while Groq says it remains independent and GroqCloud keeps running.
Could the deal be undone?
The Times' sources say the department may fine Nvidia if it finds fault, but would probably not require the arrangement to be reversed.
Have regulators ruled on any of these license-and-hire deals?
Only the UK and Brazilian reviews of Microsoft's Inflection arrangement have concluded, both clearing it; no U.S. agency has issued a finished decision on any of them.