Nvidia Reportedly Agrees to Buy Hugging Face for $12.9 Billion

Nvidia has reportedly struck a deal to acquire Hugging Face, the widely used open-source AI hub, in a transaction valued at $12.9 billion, according to a report from The Information citing a person familiar with the matter. The news follows days of speculation after Business Insider first reported over the weekend that Hugging Face was fielding acquisition interest, with talks potentially valuing the company at more than $13 billion.

As of the latest reporting, Business Insider says the negotiations have not yet produced a signed agreement and could still fall apart. Both Nvidia and Hugging Face have so far declined to comment on the reports, notable given Nvidia’s history of quickly responding to stories it considers inaccurate.

Why Hugging Face, Why Now

Founded in 2016, Hugging Face has grown into one of the internet’s most popular destinations for developers to share, download, and deploy open-source AI models — often described as a “GitHub for AI.” Acquiring it would hand Nvidia a significant foothold in the open-source AI ecosystem at a moment when open-weight models are rapidly closing the gap with closed systems from labs like OpenAI and Anthropic.

The strategic logic centers on Nvidia protecting its dominance in AI chips. Several major closed-source labs — including OpenAI, Google, Amazon, and Anthropic — are now developing their own AI chips to reduce dependence on Nvidia’s hardware. A thriving open-source model ecosystem gives customers alternatives to those labs, which in turn keeps a larger share of the market reliant on Nvidia’s chips. Nvidia has already invested tens of billions of dollars into its own open-source AI model efforts.

Hugging Face CEO Clem Delangue has spent much of the year publicly championing open-source AI alongside Nvidia, amid a broader Washington debate over whether open-weight models should face restrictions. That debate intensified after Chinese labs, including Moonshot AI with its Kimi K3 model, released systems that matched leading U.S. models on benchmarks at a fraction of the cost. Delangue has pointed to a recent letter — signed by Nvidia CEO Jensen Huang and two dozen other companies — urging U.S. policymakers to support rather than restrict open models, and has warned publicly that China is pulling ahead in the space.

The deal would also mark a return for Nvidia to the cloud computing business, roughly a year after it scaled back its own DGX Cloud unit. Hugging Face already helps developers run AI models on rented compute, giving Nvidia a potential path back into cloud services without building from scratch. There’s a financial angle too: Nvidia has committed to backstopping tens of billions of dollars in cloud computing deals for its customers, and owning Hugging Face would give it a channel to resell any unused capacity.

A Steep Valuation Jump

The reported price is a dramatic increase from Hugging Face’s last funding round. In 2023, the company raised $235 million at a $4.5 billion valuation, led by Salesforce Ventures with participation from Alphabet’s GV and IBM Ventures, among others. Nvidia itself was already an investor at the time.

This also isn’t Nvidia’s first attempt to get closer to Hugging Face. Late last year, Hugging Face turned down a $500 million investment offer from Nvidia that would have valued the company at $7 billion, reportedly because it didn’t want a dominant investor influencing its decisions. A full acquisition is structurally different from taking on one large backer, which may help explain the shift.

Hugging Face remains relatively small by revenue for a company commanding a $13 billion price tag — reportedly generating around $150 million annually, up from about $100 million just two months earlier. That growth has pushed the company close to profitability, Delangue told TechCrunch last month, though a valuation this size would still represent a steep multiple.

Part of a Bigger Consolidation Wave

The reported deal arrives amid a broader wave of consolidation in AI infrastructure. It follows Stripe’s move to acquire OpenRouter, a startup that helps customers route tasks across different AI models, for a reported $7 billion — a massive jump from OpenRouter’s $1.3 billion valuation just months earlier in its Series B round.

If finalized, the Nvidia-Hugging Face deal would rank among the largest acquisitions in the AI infrastructure space to date, underscoring how central control over both hardware and open-source software distribution has become to the competitive dynamics of the AI industry.

This story is developing and based on reports from The Information, Business Insider, and other outlets. Neither Nvidia nor Hugging Face has officially confirmed the transaction.