The U.S. Department of Justice is investigating whether a $20 billion (approximately 26.7 trillion won) licensing agreement between Nvidia and artificial intelligence chip startup Groq was designed to evade antitrust scrutiny, The New York Times and Bloomberg reported on the 9th, local time.

According to the reports, citing anonymous sources, the Justice Department launched the investigation shortly after the deal was announced in December of last year, requesting related materials from Nvidia and examining the details of the transaction.

At the time, Groq described the agreement as a "non-exclusive licensing contract," through which Nvidia gained access to Groq's language processing unit (LPU) technology for AI inference.

Along with the deal, Groq CEO Jonathan Ross and COO Sunny Madra moved to Nvidia, while Groq itself remained an independent corporate entity.

Subsequently, members of the U.S. Congress pointed out that the transaction amounted to a de facto acquisition that hinders competition.

Sources noted that while the Justice Department could impose civil penalties if issues are found, the likelihood of invalidating the transaction itself is low.

The investigation has not yet reached a conclusion and could end without any action.

An Nvidia spokesperson pushed back, saying, "The Groq case is a prime example of the U.S. system working as intended, designed to foster innovation, reward entrepreneurs, and benefit consumers."

The Justice Department declined to comment, citing the pending nature of the matter.

The investigation comes amid ongoing concerns that big tech companies are using licensing and hiring combination deals to absorb AI technology and talent, strengthening their dominance in the AI industry while bypassing regulatory scrutiny.

Amazon, Microsoft (MS), and Alphabet (Google) have also utilized similar types of transactions.

Federal Trade Commission (FTC) Commissioner Andrew Ferguson stated in January that he was looking into these types of deals, while U.S. Senators Elizabeth Warren and Richard Blumenthal urged the FTC and the Justice Department in February to investigate similar transactions by Nvidia, Meta, and Google.

The New York Times pointed out that some of these deals leave startups hollowed out after being stripped of their core resources.

Before the Nvidia deal, Groq was valued at $7 billion (approximately 9.4 trillion won) according to market research firm PitchBook.

At the time, investors included a Samsung-affiliated venture fund, BlackRock, and 1789 Capital, a firm where Donald Trump Jr., the son of President Donald Trump, participates as a partner.

According to a recent separate report by Bloomberg, Groq raised a new funding round of $350 million last month, valuing the company at $3.5 billion (approximately 4.7 trillion won).

This means the company's valuation has dropped to about half of what it was before the deal with Nvidia.

(Photo: LinkedIn capture, Yonhap News)