NVIDIA's Licensing Deal with AI Chipmaker Groq Reportedly Faces US Antitrust Probe

The U.S. Department of Justice is reportedly investigating whether NVIDIA Corp. (NVDA) structured a deal with artificial intelligence chipmaker Groq to improperly avoid antitrust review. The development, reported by market media citing two people familiar with the matter, has raised investor concerns about increasing regulatory scrutiny facing the dominant AI chip supplier.

Details of the Investigation

The probe focuses on an agreement signed last year between NVIDIA and Groq. At the time, Groq described the arrangement as a "non-exclusive licensing agreement" that allowed NVIDIA to use Groq's chips, which are custom-designed for running AI tasks.

As part of the deal, Groq's then-CEO Jonathan Ross and COO Sunny Madra joined NVIDIA. Investigators are reportedly examining whether this type of arrangement—licensing technology and hiring key executives without a formal acquisition—was intended to bypass the automatic government reviews required for traditional mergers and acquisitions.

Antitrust Context

Such arrangements can sometimes fall outside the scope of standard M&A reporting requirements, which are designed to allow regulators to assess whether a transaction could harm market competition before it is completed. The investigation highlights a growing focus by regulatory bodies on unconventional deals in the tech sector, particularly those involving companies with significant market power.

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For NVIDIA, which holds a commanding position in the market for AI accelerators, any new antitrust probe adds to the regulatory overhang. The outcome could have broader implications for how tech companies structure strategic partnerships and talent acquisitions in the future.

Market Impact

News of the potential probe triggered a negative reaction in derivative markets sensitive to NVIDIA's stock performance. In Hong Kong trading, the CSOP FTSE NVIDIA 2X Leveraged Daily Index ETF (07788), a product designed to amplify the daily returns of NVIDIA's stock, fell 2.59% to HK$174.65.

The decline in the leveraged ETF underscores investor sensitivity to regulatory risks that could potentially challenge NVIDIA's growth trajectory and market dominance.