Nvidia paid $17.0 billion for Groq technology and personnel without purchasing a single Groq equity interest, customer contract, or existing product.
Now, the structure that allowed Groq to remain an independent company is reportedly under Justice Department scrutiny over whether it was designed to avoid the antitrust review normally triggered by a large acquisition.
Nvidia’s fiscal 2026 annual report shows $13.0 billion was paid when the December transaction closed, with another $4.0 billion due within one year. Nvidia recorded $14.4 billion of goodwill, primarily tied to the workforce and future development of the licensed technology, alongside a $2.5 billion developed-technology intangible asset.
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The New York Times reported Wednesday that the DOJ opened an investigation shortly after the deal was announced and subsequently sent Nvidia a formal demand for information. The inquiry is examining whether Nvidia structured the licensing agreement to sidestep antitrust scrutiny, according to two anonymous sources familiar with the matter.
The December agreement gave Nvidia a non-exclusive license to Groq’s inference technology while Groq founder Jonathan Ross, then-president Sunny Madra, and other employees moved to Nvidia. Groq remained independent under CEO Simon Edwards, and GroqCloud continued operating.
The legal issue is not simply whether a transaction is called an acquisition. Federal Hart-Scott-Rodino rules state that transactions or devices used to avoid filing requirements can be disregarded, with regulators instead applying the rules to the transaction’s substance. The FTC has previously said regulators can look through deal structures when avoidance of premerger filing is the purpose of the arrangement.
DOJ antitrust leadership had already signaled concern. In March, Acting Assistant Attorney General Omeed Assefi told Reuters that acquihire structures designed to circumvent review are a regulatory “red flag,” while declining to discuss specific investigations. Reuters cited Nvidia’s Groq transaction as a recent example of the model.
“The Groq story is a prime example of the American system working as designed to promote innovation, reward entrepreneurs and benefit consumers,” a Nvidia spokesperson said to Reuters.
The financial transaction has meanwhile continued settling. Nvidia’s latest quarterly filing shows $2.94 billion of Groq-related cash payments during the first half of fiscal 2027, leaving $986 million of accrued purchase consideration as of July 26.
The Times further reported that regulators could impose a fine if they determine the transaction was mishandled, although its sources said the DOJ would probably not seek to unwind the arrangement.
