The DOJ Is Investigating Nvidia’s Licensing Deal With Chip Startup Groq

The Department of Justice is looking into whether Nvidia tried to avoid antitrust scrutiny in its $20 billion deal to license the technology of chip startup Groq and hire most of its employees in December, the New York Times reported Wednesday.

The two companies described the deal as a “nonexclusive” licensing agreement that gave Nvidia access to Groq’s chip technology, rather than an outright acquisition. Now, Groq’s founding team and most Groq employees work at Nvidia developing Groq LPX server racks, designed to run AI models quickly and in tandem with Nvidia’s flagship graphics processing units. Groq still exists as an independent company, and is becoming a cloud provider that offers access to Groq and Nvidia chips.

Nvidia is not the first or only company to have done a license-and-hire deal. Similar deals over the last couple of years include agreements between Microsoft and AI startup Inflection, Google and Windsurf, and Amazon and Adept AI. Nvidia has since struck a similar deal with startup Poolside.

Nvidia has been in a dealmaking frenzy, buying up companies like Hugging Face and investing tens of billions up and down the supply chain—though usually one step removed from a potentially competitive AI chip designer like Groq.

The Justice Department opened the investigation into the Groq deal shortly after it was announced in December and has sent Nvidia a formal demand for information about it, the Times reported.

“The Groq story is a prime example of the American system working as designed to promote innovation, reward entrepreneurs, and benefit consumers,” an Nvidia spokesperson said. The DOJ did not immediately respond to a request for comment.