Nvidia has agreed to acquire Hugging Face for $12.9 billion, according to a report from The Information published Wednesday night, which cited a person familiar with the matter. Business Insider, which first reported over the weekend that Hugging Face was receiving takeover interest, said the talks could value the company at more than $13 billion but had not yet reached a signed agreement and could still fall apart. Neither Nvidia nor Hugging Face has responded to requests for comment, a silence that is notable for Nvidia given its history of quickly addressing reports it considers inaccurate.
The deal would give Nvidia a major foothold in open-source AI, since Hugging Face, founded in 2016, is a leading hub where developers share and download open-source models. This comes as open-source developers are working to close the gap with closed AI systems from companies like OpenAI and Anthropic. For Nvidia, the acquisition is largely about protecting its dominance in AI chips, which appears increasingly at risk as major closed-source labs including OpenAI, Google, Amazon, and Anthropic build their own chips to reduce reliance on Nvidia. A strong open-source ecosystem gives customers alternatives to those closed labs, keeping more of the market dependent on Nvidia’s hardware, which is why Nvidia has already invested tens of billions of dollars in its own open-source models.
The move follows months of public alignment between Hugging Face CEO Clem Delangue and Nvidia’s open-source push, amid debate in Washington over possible restrictions on open-weight models. Chinese labs like Moonshot AI have released systems, such as the Kimi K3 model, that matched leading U.S. models on benchmarks at lower operating costs, raising competitive and national-security concerns among U.S. officials. White House advisor David Sacks has suggested those fears were fueled by the duopoly of Anthropic and OpenAI. In a CBS appearance earlier this month, Delangue said Hugging Face used an Nvidia-modified version of a Chinese open-source model to defend itself after a cyberattack, and he cited a letter signed by Nvidia CEO Jensen Huang and 24 other companies, including Hugging Face, urging the U.S. government to support open models. He made similar points in a late July CNBC interview, warning that China is clearly dominating open-source AI.
The acquisition would also mark a return for Nvidia in cloud computing, a market it reportedly scaled back in about a year ago with its DGX Cloud business. Owning Hugging Face, which already helps developers run AI models using rented computing power, could let Nvidia re-enter that market without building from scratch. The deal also provides a financial safety net: Nvidia has promised to cover costs for tens of billions of dollars in cloud computing deals for customers, and if those customers don’t use all their reserved capacity, Nvidia could use Hugging Face’s customer base to sell that unused computing power.
The $12.9 billion price is a huge jump from Hugging Face’s last known valuation of $4.5 billion, set in a 2023 funding round of $235 million led by Salesforce Ventures, with participation from Alphabet’s GV, IBM Ventures, and Nvidia itself. This is not the first time Nvidia has approached Hugging Face: the company reportedly turned down a $500 million investment offer from Nvidia late last year that valued it at $7 billion, saying it didn’t want a dominant investor that could sway its decisions. A buyout, however, is different from taking on one giant backer, as it often means ceding control while facing pressure to keep growing. Hugging Face is still a relatively small business by revenue, generating about $150 million annually, up from roughly $100 million two months earlier, according to The Information, and Delangue told TechCrunch last month that growth has brought the company close to profitability.
A price near $13 billion would represent an enormous multiple for a company of that size, making the offer hard to refuse. The deal would also give Hugging Face access to Nvidia’s deeper financial resources at a time when other AI infrastructure competitors are being acquired, as evidenced by Stripe’s recent agreement to buy OpenRouter, a startup valued at $1.3 billion in May that helps customers choose between AI models based on needs and budget; Stripe reportedly paid more than $7 billion for it. For Nvidia, the acquisition would seal a longtime relationship with a platform that has become central to open-source AI development in the U.S., while giving the chipmaker a direct channel to developers and their computing needs.
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