Nvidia reportedly nears $12.9 billion acquisition of Hugging Face

Nvidia is closing in on one of the largest acquisitions the AI industry has seen. According to The Information, the chipmaker has agreed to buy Hugging Face, the leading hub for open-source AI models, for $12.9 billion. The deal is not done, though. Business Insider, which first reported over the weekend that Hugging Face had drawn takeover interest, wrote that the talks — which would value the company at more than $13 billion — had not yet produced a signed agreement and could still collapse. TechCrunch, which compiled the reporting, said neither company responded to a request for comment, and pointed out that Nvidia has previously been quick to rebut reports it considers inaccurate.

Alignment built over months

Hugging Face, founded in 2016, is where much of the open-source AI world shares and downloads models, and its leadership has spent this year publicly aligned with Nvidia. In an appearance on CBS's "Face the Nation" earlier this month, CEO Clem Delangue described how the company used an Nvidia-modified version of a Chinese open-source model to defend itself after a cyberattack, and cited a letter signed by Nvidia CEO Jensen Huang and 24 other companies urging the U.S. government to support open models rather than restrict them. In a late-July CNBC interview, he made a similar case, warning that China is "clearly dominating" open-source AI.

The backdrop is a policy fight. As TechCrunch reports, officials in Washington have weighed restrictions on open-weight models after Chinese labs such as Moonshot AI released systems, including its Kimi K3, that matched leading U.S. models on benchmarks at lower running cost. Critics of closed labs, including White House advisor David Sacks, have suggested such concerns were being fanned by the Anthropic–OpenAI "duopoly."

Protecting the chip business

The commercial logic starts with silicon, according to TechCrunch. The biggest closed-source labs — OpenAI, Google, Amazon and Anthropic — are all building their own AI chips to reduce their dependence on Nvidia. A thriving open-source ecosystem gives customers alternatives to those labs, which in turn keeps more of the market running on Nvidia hardware. Nvidia has already put tens of billions of dollars into building open models of its own.

A second run at cloud computing

Nvidia reportedly scaled back its own cloud business, DGX Cloud, about a year ago. According to The Information, Hugging Face — which already helps developers run models on rented compute — could give Nvidia a route back into that market without building from scratch. There is a hedging benefit as well: Nvidia has promised to help cover the cost of tens of billions of dollars in cloud-computing deals for its customers, and if that capacity goes unused, owning Hugging Face would let Nvidia resell it to the platform's user base.

From $4.5 billion to nearly $13 billion

The reported price is a big step up from Hugging Face's last known valuation. The company raised $235 million in 2023 at a $4.5 billion valuation, in a round led by Salesforce Ventures with participation from Alphabet's GV, IBM Ventures and Nvidia itself. The Financial Times previously reported that Hugging Face turned down a $500 million Nvidia investment late last year at a $7 billion valuation, saying it did not want a single backer with enough weight to steer its decisions.

Its business is growing but still small: The Information reports revenue of roughly $150 million a year, up from about $100 million two months earlier, and Delangue told TechCrunch last month the company is close to profitability. The broader consolidation wave adds pressure — Stripe reportedly agreed earlier this month to pay more than $7 billion for OpenRouter, a model-routing startup valued at $1.3 billion in May.

Why it matters

If the deal closes, the de facto home of open-weight models would sit inside the company that sells most of the hardware those models run on. That would strengthen Nvidia's hand as closed labs design their own chips, and it tests the neutrality of a platform that hosts models from many competing labs — echoing the influence concerns Hugging Face itself raised when it rejected Nvidia's investment last year. It also shows how quickly the AI infrastructure layer is consolidating, and what buyers will now pay: nearly $13 billion for a company generating about $150 million in annual revenue.