Nvidia reportedly agrees to buy Hugging Face for $12.9 billion
Nvidia has agreed to buy Hugging Face for $12.9 billion, The Information reported Wednesday night, citing a source familiar with the matter. Business Insider, which first reported over the weekend that Hugging Face was fielding takeover interest, said Wednesday night that the talks, which would value the company at more than $13 billion, had not yet produced a signed agreement and could still fall apart. Nvidia and Hugging Face have not responded to requests for comment; Nvidia's silence is notable because the company has moved quickly in the past to correct reports it considers inaccurate.
Hugging Face, founded in 2016, is one of the most popular hubs for developers to share and download open-source AI models. Buying it would give Nvidia a strong foothold in open-source AI just as open-source developers work to close the gap with closed systems from labs like Anthropic and OpenAI. The strategic logic centers on protecting Nvidia's dominance in AI chips: OpenAI, Google, Amazon and Anthropic are all building their own AI chips to cut reliance on Nvidia, and a thriving open-source ecosystem gives customers alternatives to those closed labs, which in turn keeps more of the market dependent on Nvidia hardware. Nvidia has already put tens of billions of dollars into its own open-source AI models for the same reason.
Hugging Face CEO Clem Delangue has spent much of the year publicly aligned with Nvidia's open-source push, amid a Washington debate over possible restrictions on open-weight models after Chinese labs such as Moonshot AI released systems like Kimi K3 that matched leading U.S. models on benchmarks at much lower cost. White House advisor David Sacks was among critics of closed labs who suggested national-security fears were being fanned by what he called the "duopoly" of Anthropic and OpenAI. On CBS's "Face the Nation" earlier this month, Delangue said Hugging Face used an Nvidia-modified version of a Chinese open-source model to defend itself after a cyberattack, and he pointed to a recent letter, signed by Nvidia CEO Jensen Huang and 24 other companies including Hugging Face, urging the U.S. government to support open models rather than restrict them. In a separate CNBC interview in late July, Delangue cited the same letter while warning that China is "clearly dominating" open-source AI.
The deal would also mark a comeback for Nvidia in cloud computing after it scaled back its own DGX Cloud business about a year ago; owning Hugging Face, which already lets developers run AI models on rented compute, could give Nvidia a way back into that market. It would also give Nvidia a place to sell any unused capacity from the tens of billions of dollars in cloud-computing commitments it has promised to help cover for its customers.
The reported $12.9 billion price is a large jump 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. Hugging Face had already turned down a $500 million Nvidia investment offer late last year that would have valued it at $7 billion, according to the Financial Times, saying at the time it did not want a dominant investor able to sway its decisions; a full buyout differs from taking on one large backer in that respect. The Information reported Hugging Face was recently generating about $150 million a year in revenue, up from roughly $100 million just two months earlier, growth Delangue said last month had brought the company close to profitability. The reported price also comes as other AI-infrastructure competitors get absorbed by larger companies: Stripe reportedly paid more than $7 billion earlier this month for OpenRouter, a startup founded in early 2023 that helps customers pick AI models for different tasks and budgets, after OpenRouter was valued at just $1.3 billion in its Series B round in May.
Key facts
- The Information reported Nvidia agreed to buy Hugging Face for $12.9 billion; Business Insider says the talks (implying a valuation over $13 billion) are not yet a signed deal.
- Neither Nvidia nor Hugging Face has confirmed the report; neither has responded to requests for comment.
- Hugging Face turned down a $500 million Nvidia investment last year at a $7 billion valuation, up from a $4.5 billion valuation in its 2023 funding round.
- Hugging Face was recently generating about $150 million a year in revenue, up from roughly $100 million two months earlier.
- The reported deal follows Stripe's more-than-$7-billion acquisition of OpenRouter, which had been valued at $1.3 billion in May.
Why it matters
If it closes, the deal would hand Nvidia the most popular hub where developers share and download open-source AI models, at a moment when Nvidia's chip dominance looks increasingly exposed: OpenAI, Google, Amazon and Anthropic are all building their own AI chips to reduce reliance on Nvidia. A strong open-source ecosystem gives customers alternatives to those closed labs and keeps more of the market dependent on Nvidia hardware, which is also why Nvidia has already poured tens of billions of dollars into its own open-source models. The deal would additionally be a route back into cloud computing for Nvidia, which scaled back its own DGX Cloud business about a year ago, and would give it somewhere to resell unused capacity from the cloud-computing commitments it has promised to help cover for customers.
Who it affects
Nvidia and Hugging Face CEO Clem Delangue sit at the center of the reported deal. It would also reshape competitive dynamics for closed AI labs (OpenAI, Google, Amazon, Anthropic) racing to build their own chips, for open-source developers who rely on Hugging Face's hub, and for the Washington policy debate over restricting open-weight models, in which White House advisor David Sacks has criticized what he calls the closed-lab "duopoly." It follows a broader pattern of AI-infrastructure consolidation, illustrated by Stripe's recent acquisition of OpenRouter.
How to use it
There is nothing to use yet: no agreement has been signed. The financial shape of a possible deal is concrete, though. Hugging Face's reported $12.9 billion price (or a valuation above $13 billion per Business Insider) would be a large multiple on a company generating about $150 million a year in revenue, up from roughly $100 million two months earlier, and it dwarfs the $4.5 billion valuation from Hugging Face's 2023 funding round and the $7 billion valuation attached to the $500 million Nvidia investment offer Hugging Face turned down last year.
How solid is it
The core claim, that Nvidia agreed to buy Hugging Face for $12.9 billion, comes from The Information citing a source familiar with the matter. Business Insider, which first reported Hugging Face was fielding takeover interest over the weekend, independently reported the talks Wednesday night but says no agreement has been signed and the deal could still fall apart. Nvidia and Hugging Face have not responded to requests for comment; TechCrunch notes Nvidia's silence is notable because it has moved quickly in the past to correct reports it considers inaccurate. Delangue's public statements this year, aligning with Nvidia's open-source push, are consistent with but do not confirm the reported deal.
Risks and caveats
By Business Insider's account, no agreement has been signed and the talks could still collapse; the source gives no closing date or timeline. The reported valuation gap ($12.9 billion versus "more than $13 billion") reflects two different reports rather than one confirmed figure. A completed deal would concentrate a major open-source AI distribution hub inside the largest AI-chip maker, which carries its own competitive and policy implications given the live Washington debate over open-weight models.
“close to profitability”
— Clem Delangue, Hugging Face CEO