Nvidia has agreed to acquire the popular open-source AI platform Hugging Face for $12.9 billion, according to The Information, citing a source familiar with the matter. While Business Insider reported that talks could still fall through, The Information noted that a signed agreement had not yet been reached.
TechCrunch reached out to both companies for comment, but neither has responded to date. The silence is notable given Nvidia's history of quickly addressing inaccurate reports in the past.
The acquisition would provide Nvidia with a significant foothold in the open-source AI ecosystem, a space where developers are actively working to compete with closed systems from major players like Anthropic and OpenAI.
This strategic move is largely driven by the need to protect Nvidia's dominance in AI hardware. As competitors like OpenAI and Google develop their own chips, a robust open-source model ecosystem offers customers alternatives that keep them reliant on Nvidia's infrastructure.
Nvidia has already invested billions into its own open-source models, and the leadership of Hugging Face, including CEO Clem Delangue, has publicly aligned with Nvidia's push for open models amid growing regulatory scrutiny in Washington.
Delangue highlighted this alignment during a recent appearance on CBS, noting that Hugging Face utilized a Nvidia-modified version of a Chinese model to defend against a cyberattack. He also cited a letter signed by Jensen Huang urging the government to support open models over restrictions.
The deal could also serve as a return to the cloud computing market for Nvidia, which had previously scaled back its DGX Cloud service. Owning Hugging Face would allow the company to monetize unused computing capacity from its customers.
The valuation represents a massive increase from Hugging Face's previous assessment of $4.5 billion in 2023. Nvidia had previously offered $500 million for a $7 billion valuation but was rejected due to concerns over losing independence.
Despite the high price tag relative to its revenue, the deal provides Hugging Face with access to Nvidia's financial resources and could be difficult to resist given the company's recent profitability.
The transaction comes amid a trend of consolidation in the AI infrastructure sector, similar to Stripe's recent acquisition of OpenRouter for over $7 billion.
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