Nvidia agrees to buy Hugging Face for $12.9 billion, reports
Nvidia is set to acquire AI platform Hugging Face for $12.9 billion, according to reports, in a deal that would strengthen its position in open-source AI and protect its dominance in AI chips.
Nvidia has agreed to acquire Hugging Face, the leading repository for open-source AI models, for $12.9 billion, according to a report from The Information. The deal, if completed, would give the chipmaker a major foothold in the open-source AI ecosystem at a time when open models are increasingly closing the gap with closed systems from rivals such as OpenAI and Anthropic.
Hugging Face hosts thousands of open-source AI models, benchmark evaluations, and datasets used for training and testing. The platform is widely used by developers and enterprises to download, fine-tune, and deploy models. The acquisition would help Nvidia protect its dominant position in AI chips, which has come under pressure as major tech companies including OpenAI, Google, Amazon, and Anthropic develop their own silicon to reduce reliance on Nvidia hardware.
Those who download open-source models from Hugging Face typically need to run them on their own computing infrastructure, which usually involves Nvidia GPUs, either on-premise or in the cloud. Hugging Face also uses Nvidia GPUs for its paid hosting services. A strong open-source ecosystem keeps more of the market tied to Nvidia's hardware, giving customers options outside the closed labs while maintaining demand for the company's chips.
The acquisition would also mark a return to cloud computing for Nvidia, a business it reportedly scaled back about a year ago. Owning Hugging Face could give the company a way to offload unused cloud capacity from computing deals it has guaranteed for customers. Nvidia has already invested tens of billions of dollars in its own open-source models.
Business Insider first reported over the weekend that Hugging Face was fielding takeover interest, noting that talks had not yet produced a signed agreement and could still fall apart. The Information cited an unnamed source with knowledge of the deal's successful conclusion. Fortune could not independently verify the reports, and Nvidia and Hugging Face did not respond to requests for comment.
Hugging Face last raised money in 2023, when a $235 million round led by Salesforce Ventures valued it at $4.5 billion. The company turned down a $500 million investment from Nvidia last year that would have valued it at $7 billion, reportedly because it did not want a single dominant investor. The 10-year-old company has said it is nearing profitability, with revenue climbing to roughly $150 million a year.
The talks come as AI infrastructure companies increasingly get absorbed by larger players, following Stripe's recent purchase of OpenRouter for more than $7 billion. Hugging Face CEO Clem Delangue has publicly backed Nvidia's open-source push amid fears that officials in Washington will restrict open-source models. Chinese labs, such as Moonshot AI with its Kimi K3 model, have released open-source systems that rival leading U.S. models on benchmarks at a much lower cost, feeding concerns in Washington about falling behind in the AI race and national security.
Delangue signed a letter this year, along with Nvidia CEO Jensen Huang and more than twenty other companies, urging the government to support open models rather than restrict them. Hugging Face has also been in the middle of a major media story over the last few months after OpenAI disclosed in July that its own AI models were behind an autonomous cyberattack on the platform. According to OpenAI, its models escaped a sandboxed testing environment, accessed the internet, and exploited a vulnerability to gain access to Hugging Face's systems while trying to find information to cheat on an evaluation. Hugging Face reported the incident to local police before it knew OpenAI's models were responsible, and the episode drew alarm from researchers and politicians.
