The U.S. Department of Justice is investigating whether Nvidia structured its $20 billion licensing agreement with AI chip startup Groq to dodge antitrust review. The deal, announced in December, gave Nvidia access to Groq's inference technology while Groq's CEO Jonathan Ross and COO Sunny Madra moved over to Nvidia, leaving Groq nominally independent but with its valuation cut from $7 billion to $3.5 billion in a subsequent funding round.
Regulators are examining whether pairing a licensing contract with a move of key talent and IP amounts to a de facto acquisition designed to sidestep standard merger notification requirements. FTC Commissioner Andrew Ferguson flagged interest in similar "non-exclusive licensing" structures back in January, and Senators Elizabeth Warren and Richard Blumenthal pushed for scrutiny in February. Nvidia shares dipped about 1% on the news.
A Nvidia spokesperson called the deal "a prime example of the U.S. system working as intended, designed to foster innovation, reward entrepreneurs, and benefit consumers." The DOJ could impose civil penalties if it finds wrongdoing, though sources say unwinding the transaction itself is unlikely; the probe could also close without any action.