The U.S. Department of Justice is investigating whether Nvidia's $17 billion licensing deal with Groq was structured to avoid antitrust review, according to The New York Times. The investigation began shortly after the deal was announced in December 2025, and the DOJ has issued a formal request for information to Nvidia. If wrongdoing is found, the agency could seek fines—but is unlikely to attempt to unwind the transaction.
What $17 Billion Bought: Tech, Talent, No Acquisition
Nvidia acquired a non-exclusive license to Groq's chip technology and hired several Groq executives, including founder Jonathan Ross. Groq continues to operate as an independent company under new CEO Simon Edwards.
The structure is the point. Nvidia didn't buy the company—it bought the most valuable parts. The DOJ is now investigating whether that arrangement functions as an acquisition in practice while avoiding the antitrust review that a traditional merger would trigger.
Two Senators Called It "Acquisition in Everything But Name"
Shortly after the deal was announced, Senators Elizabeth Warren and Richard Blumenthal wrote to Nvidia CEO Jensen Huang demanding an explanation. "By licensing its technology and hiring its most important employees, Nvidia has effectively acquired Groq in everything but name," they wrote.
The senators described the "reverse acquihire" strategy—acquiring a company's key assets without acquiring the company itself—as designed to evade standard antitrust notification and review procedures.
The FTC Is Already Watching "Acquihires"
Federal Trade Commission Chairman Andrew Ferguson said in January that the agency has begun reviewing arrangements where large tech companies hire startup employees instead of acquiring the companies outright. "We're beginning to look at these acquihires to make sure they're not attempting to circumvent the merger review process," Ferguson said.
The trend is not unique to Nvidia. Microsoft, Meta, and Amazon have all used similar structures to absorb AI startup talent and technology.
Groq 3 LPX Is Already in Production—Investigation or Not
Despite the investigation, the technical output of the deal is already shipping. Nvidia's Groq 3 LPX inference rack entered full production in August 2026. Each rack contains 256 Groq chips, manufactured by Samsung, generating approximately 3,400 tokens per second.
Nebius Token Factory is the first AI cloud provider to adopt the system, with deployment planned by the end of 2026. Nvidia estimates that the Vera Rubin NVL72 platform with Groq 3 LPX delivers up to 35x higher inference throughput per megawatt than GB200 NVL72 in long-context, low-latency scenarios.
Nvidia says these specialized systems are designed to complement, not replace, GPUs. Groq chips handle the latency-sensitive "decode" phase of inference, while GPUs continue to handle training and general-purpose inference.
Market Reaction and Groq's Current State
Groq raised $350 million in August 2026 at a $3.5 billion valuation—roughly half of its $6.9 billion valuation before the Nvidia deal. The round was led by Disruptive, with Nvidia participating as an investor.
Groq is transitioning into a data center operator, with plans to expand its data center capacity beyond 200 megawatts next year.
P.S. The DOJ investigation may ultimately result in fines rather than an attempt to unwind the deal. But the "buy the tech, hire the team, leave the company" model is now on the antitrust radar. For Nvidia, the real risk isn't this deal—it's that every future deal of this type will face more scrutiny.
Frequently Asked Questions
Q: What is the DOJ investigating?
A: The DOJ is investigating whether Nvidia's $17 billion licensing deal with Groq was structured to avoid antitrust review. The concern is that the deal functions as an acquisition without triggering merger notification requirements.
Q: What did Nvidia actually buy?
A: Nvidia acquired a non-exclusive license to Groq's chip technology and hired several Groq executives, including founder Jonathan Ross. Groq continues to operate as an independent company under new CEO Simon Edwards.
Q: Why is this deal structure controversial?
A: Senators Elizabeth Warren and Richard Blumenthal called it "acquisition in everything but name." They argue that by licensing the technology and hiring key employees, Nvidia effectively acquired Groq without going through standard antitrust review.
Q: What is a "reverse acquihire"?
A: A reverse acquihire is a deal structure where a company acquires a startup's key assets and talent without acquiring the company itself—avoiding the merger review process that a traditional acquisition would trigger.
Q: Has the FTC commented?
A: FTC Chairman Andrew Ferguson said in January that the agency has begun reviewing "acquihires" to ensure they're not attempting to circumvent merger review.
Q: Is Groq 3 LPX already in production?
A: Yes. Nvidia's Groq 3 LPX inference rack entered full production in August 2026. Each rack contains 256 Groq chips manufactured by Samsung, generating approximately 3,400 tokens per second.
Q: What is Groq's current valuation?
A: Groq raised $350 million in August 2026 at a $3.5 billion valuation—roughly half of its $6.9 billion valuation before the Nvidia deal.
Q: What happens if the DOJ finds wrongdoing?
A: The DOJ could seek fines, but is unlikely to attempt to unwind the transaction. The greater risk for Nvidia is that future deals of this type face more scrutiny.
Q: Which other companies use similar structures?
A: Microsoft, Meta, and Amazon have all used similar "license + hire" structures to absorb AI startup talent and technology.
Q: What is the significance of this investigation?
A: It marks the first major antitrust scrutiny of the "non-acquisition acquisition" model that has become common in the AI industry. If the DOJ takes action, it could set a precedent for how tech companies structure future deals.
