Why the DOJ Is Investigating Nvidia's Licensing Deal With Groq

Nvidia's playbook for absorbing rivals without technically buying them just hit a legal wall. The Justice Department is investigating whether Nvidia structured its licensing agreement with AI chip startup Groq to avoid antitrust review, examining a deal announced in December where Nvidia obtained rights to Groq's inference chip technology while Groq remained technically independent.

The structure is what makes this a genuine legal puzzle rather than an obvious violation. Nvidia took a non-exclusive license to Groq's technology and hired several top executives, including CEO Jonathan Ross and COO Sunny Madra — but never actually purchased the company, meaning no merger filing was ever required. Key details investigators are weighing:

• The deal's value is reported anywhere from $17 billion to $20 billion depending on the source, with the DOJ having sent Nvidia a formal request for information
• Nvidia used a nearly identical structure with AI startup Poolside, paying $6 billion to license its "model factory" and hiring 109 staff
• Senators Elizabeth Warren and Richard Blumenthal have already pressed Nvidia directly, calling the arrangement a takeover that could entrench its dominance in AI chips

Nvidia's defense is straightforward: the license is non-exclusive, Groq still exists as a company, and its engineers remain free to leave. All of that can be true while Groq is functionally no longer positioned to compete the way it once was — and that gap is likely to be the crux of the case.

Forcing Nvidia to unwind the deal is considered unlikely even if wrongdoing is found; fines are the more probable outcome. But with more than $100 billion in similar "reverse acquihire" arrangements reportedly threaded through the AI industry, this investigation could end up defining whether the entire deal structure survives regulatory scrutiny going forward.