In short
The Hart-Scott-Rodino Antitrust Improvements Act (HSR) requires anyone acquiring enough voting securities or assets to notify the Federal Trade Commission and the Department of Justice before closing and to wait a set period. 15 U.S.C. § 18a. For an AI data center deal, HSR filing is required if the transaction value exceeds $133.9 million in 2026 (between $133.9 million and $535.5 million the size of person test must also be met), and deals over $535.5 million must be filed regardless of the parties’ size. FTC Current Thresholds. After filing, the parties wait 30 days. If the agencies issue a detailed demand for information (a Second Request), the wait extends. 15 U.S.C. § 18a(b), (e). The FTC is actively investigating AI partnerships and the DOJ is pursuing AI-related antitrust remedies, while the 2023 Merger Guidelines target vertical foreclosure, data control, and minority stakes. 2023 Merger Guidelines, FTC AI inquiry, FTC AI staff report, DOJ AI antitrust enforcement. A 2024 rule that would have nearly tripled HSR filing time was struck down by a federal court, so the old form is back for now. FTC Press Release, Law firm analysis. Several states now have their own mini-HSR laws, adding parallel filing duties in Washington, Colorado, and California. WA S.B. 5122, CO S.B. 25-126, CA S.B. 25.
What is the HSR Act and when must you file for an AI data center deal?
HSR is a premerger notification law. You tell the government before you close, and they check for antitrust problems. The law applies to any acquisition of voting securities, assets, or non corporate interests that meets the dollar thresholds. 15 U.S.C. § 18a(a).
The 2026 filing thresholds
The size of transaction test is the first screen. For 2026, the minimum reportable transaction value is $133.9 million. FTC Competition Matters. If the deal is worth more than $535.5 million, you must file regardless of the companies’ sizes. FTC HSR current thresholds. For deals between $133.9 million and $535.5 million, an additional size of person test applies. One party must have total assets or annual net sales of at least $267.8 million, and the other at least $26.8 million. 2026 HSR thresholds.
| Threshold | 2026 amount |
|---|---|
| Minimum transaction size (general) | $133.9 million |
| Transaction size (automatic filing, no size-of-person test) | $535.5 million |
| Size of person (larger party) | $267.8 million |
| Size of person (smaller party) | $26.8 million |
The thresholds are adjusted each year from statutory bases of $50 million and $200 million. 15 U.S.C. § 18a(a)(2).
Filing fees and penalties
HSR filers pay a fee based on the transaction value. The 2026 schedule has six tiers. The fee is $35,000 for deals under $189.6 million and climbs to $2,460,000 for deals worth $5.869 billion or more. New HSR thresholds and filing fees for 2026 If you fail to file when required, the maximum daily civil penalty was $53,088 as of 2025 and is expected to rise. 2026 HSR thresholds.
The HSR waiting period and what happens next
After both buyer and seller submit complete filings, a 30 calendar day waiting period begins. 15 U.S.C. § 18a(b). During this time the FTC or DOJ can grant early termination, let the waiting period expire without action, or issue a Second Request. A Second Request is a detailed demand for documents and data. It permits the FTC or the DOJ to extend the waiting period for up to 30 days after both parties have complied with the request, and only a district court can grant further extensions. 15 U.S.C. § 18a(e).
In fiscal year 2024, 2,031 HSR filings were received and the agencies issued 59 Second Requests across 1,973 adjusted transactions, a 3.0 percent rate. ComplexDiscovery. Nearly half of deals over $10 billion received a Second Request in FY 2024, compared with about 6.4 percent of deals in the $1 billion to $10 billion range. ComplexDiscovery. FY 2025 saw 2,101 filings, a small increase. ComplexDiscovery. Early FY 2026 data points to a pace of about 2,650 filings annualized. ComplexDiscovery.
Why was the 2024 HSR rule change thrown out by a court?
In November 2024 the FTC issued a rule that greatly expanded the HSR form. It demanded deal rationale narratives, competition overlap descriptions, and supply relationship information. 89 Fed. Reg. 89,216. The new form would have nearly tripled the average preparation time from 37 hours to 105 hours, adding an estimated 239,020 hours and $139.3 million in annual compliance costs. FTC Final Rule. The U.S. Chamber of Commerce and other business groups sued, arguing the FTC had exceeded its authority. On February 12, 2026 the Eastern District of Texas vacated the entire rule. The court found the FTC had failed to show a single illegal merger that the old form had missed in 46 years, and that the rule’s benefits were illusory or, at least, unsubstantiated. FTC/DOJ RFI. The FTC appealed, but the Fifth Circuit denied a stay of the vacatur on March 19, 2026. The pre-2025 HSR form is now back in effect, and the FTC accepts those filings. CRS Report. On March 25, 2026 the FTC and DOJ launched a joint public inquiry to consider further changes to the form. CRS Report.
As a practical note, The vacatur removed a huge cost and complexity increase for HSR filers. As of May 2026, you file under the familiar pre-2025 rules. But the agencies are already thinking about a new version, so monitor the joint inquiry.
How are federal antitrust enforcers reviewing AI investments and partnerships?
The antitrust laws do more than HSR procedure. The FTC and DOJ can investigate and challenge deals on the substance, whether they were filed under HSR or not. For AI infrastructure, the agencies are focused on concentration in AI chips, cloud providers’ investments in AI developers, and vertical deals that could foreclose competitors’ access to compute or data.
The FTC’s 6(b) study on AI partnerships
In January 2024 the FTC ordered Microsoft, Amazon, Alphabet, OpenAI, and Anthropic to hand over information about their investments and partnerships. FTC Press Release. The staff report, released in January 2025, found that the cloud service providers held significant equity and revenue-sharing rights, had certain control and consultation rights, imposed cloud spending commitments that could increase switching costs for the AI developer partners, and had access to sensitive technical and business data that rivals did not. FTC Staff Report. The report warned that these partnerships could affect access to computing resources and engineering talent, increase switching costs for AI developer partners, and give the cloud providers access to sensitive technical and business information that may be unavailable to others. FTC Staff Report Press Release. Then-Commissioner Andrew Ferguson (now FTC Chair) dissented in part, calling the study quick and narrow in scope and objecting to speculation about the future of AI. Ferguson Statement.
Investigations into Microsoft, Nvidia, and others
The agencies split the leads. The DOJ is investigating Nvidia, which holds roughly 80 percent of the AI chip market. Investigators are examining whether Nvidia pressures cloud providers to buy multiple products and charges higher prices for networking gear to customers who want to buy AI chips from rivals. The Register, Reuters. The FTC has been probing Microsoft’s multibillion dollar investment in OpenAI, and whether the deal was structured to avoid merger review, along with Microsoft’s broader bundling and cloud licensing practices. RCPMag, Fortune, CNBC, Computerworld. The FTC pressed ahead with that investigation under the new administration in March 2025. RCPMag. The UK Competition and Markets Authority concluded in March 2025 that Microsoft’s partnership with OpenAI did not constitute a merger, though it noted Microsoft had held the ability to materially influence OpenAI since 2019. CMA Summary Decision (CMA, not FTC, investigation). Microsoft and OpenAI later modified their deal to give Microsoft a right of first refusal on new capacity instead of an exclusive commitment. Microsoft Blog.
The FTC also investigated reverse acqui hires, where a large company hires most of a startup’s employees and licenses its technology instead of buying it outright. Cases involving Microsoft and Inflection AI, and Amazon and Adept, drew FTC attention for potentially avoiding merger review. Senator Wyden letter to FTC and DOJ, CNBC report.
The 2023 Merger Guidelines and AI data center deals
The FTC and DOJ apply the 2023 Merger Guidelines when reviewing mergers and acquisitions. 2023 Merger Guidelines. Several guidelines are directly relevant to AI data center transactions.
- Guideline 5. When a merger could allow the combined firm to limit rivals’ access to products or services that its rivals use to compete, the agencies examine the extent to which the merger creates a risk. 2023 Merger Guidelines
- Guideline 6 (entrenching dominance). If one merging firm already holds a dominant position, the agencies examine whether the deal entrenches or extends that dominance. For example, the agencies examine whether the deal eliminates a nascent competitive threat or raises barriers to entry or competition. 2023 Merger Guidelines
- Guideline 11 (minority interests). Even partial ownership or minority investments can be scrutinized if they affect competition. Cloud providers that take minority stakes in AI developers without full control fall under this rule. 2023 Merger Guidelines
- Guideline 4 (potential entrant). The agencies consider whether an acquisition eliminates a potential entrant in a concentrated market. 2023 Merger Guidelines
- Data control. The Guidelines state that acquiring data to enable matching, sorting, or prediction services may let a platform weaken rivals by denying them that data. The Guidelines apply this reasoning to any merger involving important inputs to platform services. 2023 Merger Guidelines
What can we learn from recent AI data center and cloud deals?
Recent deals show the range of outcomes. Vertical integration deals have often cleared, while horizontal mergers and dominant-firm acquisitions still face resistance.
| Deal | Value | Status (as of May 2026) | What it shows |
|---|---|---|---|
| AIP consortium acquires Aligned Data Centers | ~$40 billion | Announced Oct 2025, expected close H1 2026, HSR review pending | Largest AI data center deal ever. Involves BlackRock, MGX, Microsoft, Nvidia. Subject to regulatory approvals. CNBC, BusinessWire |
| Google acquires Wiz | $32 billion | Cleared by DOJ Nov 2025, closed Mar 2026 | Google’s largest acquisition. Cloud security deal cleared unconditionally despite size. Tax alert, Econic Partners |
| CoreWeave acquires Weights & Biases | $1.7 billion | Cleared without conditions, closed May 2025 | AI infrastructure provider buying a developer tools platform. No vertical foreclosure concerns found. Law firm analysis |
| HPE / Juniper Networks | $14 billion | DOJ sued Jan 2025, then settled mid-2025 with a divestiture of HPE’s Instant On WLAN business | Horizontal merger of enterprise wireless LAN providers. First major merger challenge of Trump’s second term, resolved through a divestiture remedy rather than a block. Tax alert |
| FTC clears IBM / HashiCorp | $6.4 billion | FTC closed Second Request, cleared early 2025 | Vertical cloud infrastructure deal allowed to proceed. Seen as a retreat from expansive vertical theories. Goodwin Antitrust Update |
| Nvidia / Run:ai | ~$700 million | DOJ antitrust probe ongoing as of late 2025 | Part of broader Nvidia investigation, tests bundling and exclusion theories. The Register |
| Microsoft / OpenAI partnership | $13 billion invested | FTC investigation ongoing, UK CMA found no merger | Illustrates that non-control investments can still trigger review, and deal structures can be adjusted later. RCPMag, CMA Summary Decision |
These examples suggest that horizontal consolidation among direct competitors remains a high-risk zone. Vertical deals, especially those involving infrastructure and tools, are more likely to clear, though size and the presence of a dominant buyer (like a Big Tech cloud provider) will attract a close look.
What about state mini-HSR laws?
A growing number of states require parties to certain HSR-reportable deals to also file with the state attorney general. These mini-HSR laws do not create a separate waiting period, but they add filing obligations and daily penalties.
Washington (effective July 27, 2025) and Colorado (effective August 6, 2025). If a party has its principal place of business in the state, or has in-state annual net sales of the goods or services involved in the transaction of at least 20 percent of the federal size-of-transaction threshold (about $26.78 million for 2026), then the HSR filer must submit a copy of the federal HSR form to the state AG at the same time. WA S.B. 5122, CO S.B. 25-126. The penalty is up to not more than $10,000 per day of noncompliance. WA S.B. 5122, CO S.B. 25-126.
California (effective January 1, 2027). The requirement is similar, but California adds a filing fee of $1,000 for principal-place-of-business filers and $500 for sales-threshold filers. The penalty is not more than $25,000 per day. CA S.B. 25. This is the strictest state mini-HSR law yet.
Other states have similar bills pending in 2026, but only these three have been enacted as of this writing. If your deal includes a party with headquarters or substantial sales in Washington, Colorado, or California, build the state filing step into your closing checklist early.
Key takeaways
- Any AI data center deal above $133.9 million will almost certainly trigger federal HSR premerger notification in 2026. Deals above $535.5 million require it regardless of party size.
- The 2024 expanded HSR form is vacated. Filers now use the pre-2025 form while a court appeal and agency rulemaking proceed. This saves significant cost and time for the moment.
- HSR filing fees range from $35,000 to $2,460,000 depending on deal size. The penalty for missing a required filing can exceed $53,000 per day.
- Second Requests remain rare overall (3 percent of filings) but jump to nearly 50 percent for deals over $10 billion. Plan for the possibility in large infrastructure or platform acquisitions.
- The FTC and DOJ are actively using the 2023 Merger Guidelines to scrutinize vertical integration, data control, minority investments, and potential entrant theories in AI infrastructure.
- Recent examples show horizontal mergers facing challenges (HPE/Juniper), while many vertical deals (IBM/HashiCorp, CoreWeave/W&B, Google/Wiz) have cleared, though the pending AIP/Aligned deal will test the limits.
- Washington, Colorado, and California now have mini-HSR filing duties with stiff penalties. Any party with a meaningful connection to those states should budget for the extra filing step.
Frequently asked questions
Q:What HSR form do I file right now?
A:As of May 2026, you file the pre-2025 HSR form because the courts vacated the 2024 expanded rule. The FTC accepts those filings. Monitor the agencies’ joint inquiry in case a new form is proposed later. CRS Report
Q:Do cloud provider investments in AI startups always trigger an HSR filing?
A:Not always, but they often do. If the investment’s value exceeds $133.9 million, or if it carries control rights, board seats, or veto power, HSR filing is likely required. Even minority stakes that do not trigger HSR can still be investigated later under the Clayton Act or FTC Act. 15 U.S.C. § 18a
Q:How long does HSR review take for an AI data center deal?
A:The initial waiting period is 30 calendar days. If a Second Request is issued, the wait extends to up to 30 days after the agencies receive the information and documentary material requested, which can take months. 15 U.S.C. § 18a(b), (e)
Q:Can HSR review be avoided by structuring a deal as a partnership or minority stake?
A:It might avoid an HSR filing if the stake is below the size threshold and carries no indicia of control, but the FTC can still investigate the deal later under Section 5 of the FTC Act or Section 7 of the Clayton Act. The Microsoft/OpenAI situation shows that even a non-acquisition can face over a year of scrutiny. FTC Staff Report, CMA Summary Decision
Q:What antitrust theories are most likely to challenge an AI data center deal?
A:Vertical foreclosure (limiting rivals’ access to compute), entrenching a dominant position, eliminating a potential entrant, and controlling data that competitors rely on, all described in the 2023 Merger Guidelines. Under the 2023 Merger Guidelines, deals that combine a dominant firm with critical inputs or data assets can raise concerns under Guideline 5, which addresses a merged firm’s ability to limit rivals’ access to products or services used to compete, and Guideline 6, which addresses entrenching or extending a dominant position. 2023 Merger Guidelines
Q:Do state mini-HSR laws apply if the target or buyer has no physical presence in the state?
A:Yes, they can. The Washington and Colorado laws reach filers that have a principal place of business in the state or have in-state annual net sales of the goods or services involved in the transaction at least 20 percent of the federal size-of-transaction threshold (about $26.78 million in 2026). Physical presence is not required. WA S.B. 5122, CO S.B. 25-126
Q:What happens if I miss the HSR deadline or file late?
A:You face civil penalties of up to $53,088 per day (and climbing). The agencies can also bring an enforcement action to undo a closed deal. 2026 HSR thresholds
Q:Does the HSR waiting period freeze the target’s business?
A:No, the buyer and target can continue to operate independently. But the buyer must not exercise beneficial ownership or control over the target until the waiting period expires or is terminated. 15 U.S.C. § 18a
Q:Will the 2024 HSR rule be revived on appeal?
A:The district court vacated the entire rule, and the Fifth Circuit denied a stay. The agencies are instead considering a fresh rulemaking based on public input, regardless of the outcome of the pending appeal. CRS Report, Chamber of Commerce v. FTC
Q:How should a buyer or investor in an AI data center deal prepare for antitrust review?
A:Build HSR analysis into the deal timetable early. For large or high-profile deals, assume a Second Request and plan for the extra time and cost. Analyze the vertical and data aspects under the 2023 Merger Guidelines, and identify any state mini-HSR obligations up front. Where a deal raises competitive concerns, consider upfront remedies or restructuring before filing.
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Junde Liu, JD, LL.M. (Taxation) candidate at UF Law. Originally published on Compute Law Blog. This article is general information and does not constitute legal advice. Reading it does not create an attorney client relationship. The reader should not act on the basis of any content here without first consulting a licensed attorney in the relevant state. Last reviewed for accuracy May 23, 2026.