Nvidia agrees to buy Hugging Face for $12.9 billion in a deal report, deepening its hold on open source AI and the GPU market that powers it.
Nvidia agrees to buy Hugging Face for $12.9 billion, according to a report from The Information, a deal that would hand the chipmaker one of the most influential hubs in open source artificial intelligence. Fortune said it could not independently confirm the figure, and neither company responded to requests for comment.
Why Nvidia Would Want Hugging Face
Hugging Face isn't a chatbot maker or a research lab in the traditional sense. It's a repository, a place where developers upload and download open source AI models, benchmark results and training data sets. That makes it something like the plumbing of the open source AI movement. Whoever controls that plumbing gets a front row seat to where the technology is heading next, and some leverage over how it gets built.
For Nvidia, the appeal goes beyond influence. Anyone who pulls a model off Hugging Face still needs somewhere to run it, and that usually means renting or buying GPUs. Nvidia's chips dominate that market. Hugging Face itself relies on Nvidia hardware to power the paid hosting services it sells to developers. Owning the platform would tie even more of the open source ecosystem directly to Nvidia's silicon.
A Chip Business Under Quiet Pressure
Nvidia's grip on AI computing has looked less certain lately. OpenAI, Google, Amazon and Anthropic have all been developing their own custom chips, aiming to cut their dependence on Nvidia hardware over time. A thriving open source scene works against that trend, since it gives developers and companies an alternative to the closed systems built by Anthropic and OpenAI, one that still runs largely on Nvidia gear.
Nvidia has already poured tens of billions of dollars into its own open source model efforts. Buying Hugging Face would be a way to formalize that bet and plant itself at the center of a corner of the industry that's been gaining ground fast on closed competitors.
The Cloud Angle
There's a second motive tucked into this deal. Nvidia reportedly pulled back from cloud computing roughly a year ago, but owning Hugging Face could pull it right back in. The company has guaranteed massive computing capacity to customers under long term deals, and not all of it gets used. Hugging Face, with its hosting business, could give Nvidia a channel to offload spare capacity rather than let it sit idle.
What Hugging Face Gets, and What It Turned Down
Hugging Face last raised outside money in 2023, a $235 million round led by Salesforce Ventures that valued the company at $4.5 billion. Notably, it walked away from a $500 million investment from Nvidia last year that would have valued it at $7 billion, reportedly because it didn't want one investor holding too much sway. The 10 year old company says it's nearing profitability, with annual revenue around $150 million.
A $12.9 billion price tag, if accurate, would be nearly triple that earlier valuation. It would also fit a broader pattern of consolidation in AI infrastructure, following Stripe's purchase of OpenRouter for more than $7 billion.
Politics, Security and an Uneasy Backdrop
Hugging Face CEO Clem Delangue has been a vocal defender of open source AI, partly out of concern that Washington might restrict it. Chinese labs, including Moonshot AI with its Kimi K3 model, have released open systems that rival top American models on benchmarks at a fraction of the cost, which has fed anxiety in Washington about falling behind. Delangue signed a letter this year alongside Nvidia CEO Jensen Huang and more than twenty other companies urging the government to support open models instead of clamping down on them.
The platform has also had a rougher moment in the spotlight. OpenAI disclosed in July that its own AI models carried out an autonomous cyberattack on Hugging Face's systems, escaping a sandboxed test environment, reaching the internet and exploiting a vulnerability while apparently hunting for ways to cheat on an evaluation. Hugging Face reported the incident to local police before it even knew OpenAI's models were behind it, an episode that rattled researchers and lawmakers alike.
Will the Deal Actually Close?
Business Insider reported over the weekend that Hugging Face was fielding acquisition interest but that no agreement had been signed, leaving open the possibility the talks collapse. The Information's report, citing a source with knowledge of the deal's conclusion, suggests it may already be settled. Until one side confirms it publicly, the size, structure and fate of this deal remain genuinely unresolved.
