Nvidia Reportedly Reaches $12.9 Billion Deal to Buy Hugging Face
Nvidia has agreed to buy Hugging Face for $12.9 billion, The Information reported, citing a person familiar with the matter. Business Insider reported that negotiations had not yet resulted in a signed agreement and could still fall apart, while Nvidia and Hugging Face had not publicly commented.
The reported transaction would value Hugging Face at more than $13 billion. Founded in 2016, the company operates one of the most widely used hubs for developers to share and download open-source AI models.
A strategic position in open-source AI
Acquiring Hugging Face would give Nvidia a deeper position in the open-source AI ecosystem as developers seek alternatives to closed systems offered by companies including Anthropic and OpenAI. Nvidia has already invested tens of billions of dollars in developing its own open-source AI models.
The talks follow Hugging Face takeover interest above $13 billion, where takeover interest put a valuation above $13 billion into view. The latest report suggests the discussions have advanced, but the absence of a signed agreement means the outcome remains uncertain.
Hugging Face chief executive Clem Delangue has publicly aligned the company with Nvidia’s open-model agenda. In a recent CBS appearance, he said Hugging Face had used an Nvidia-modified version of a Chinese open-source model following a cyberattack. He also highlighted a letter signed by Nvidia chief executive Jensen Huang, Hugging Face and 24 other companies urging US policymakers to support, rather than restrict, open models.
Cloud capacity and a sharply higher valuation
The acquisition could also provide Nvidia with a route into cloud computing. Nvidia reportedly scaled back DGX Cloud about a year ago, while Hugging Face already helps developers run models on rented computing infrastructure. The Information reported that ownership could allow Nvidia to return to that market without building a comparable service from the ground up.
Nvidia has also committed to help cover tens of billions of dollars in cloud-computing deals for customers. If customers do not consume the capacity they have contracted for, Hugging Face could offer Nvidia another channel through which unused compute might be sold to its users.
The proposed price would be a substantial increase from Hugging Face’s last disclosed valuation of $4.5 billion, set in a 2023 funding round that raised $235 million. Salesforce Ventures led that round, with Alphabet’s GV, IBM Ventures and Nvidia among the investors. The Financial Times previously reported that Hugging Face rejected a $500 million Nvidia investment offer late last year that would have valued it at $7 billion.
The Information reported that Hugging Face was recently generating about $150 million in annual revenue, up from roughly $100 million two months earlier, and Delangue told TechCrunch the company had become close to profitability. For businesses building on open models, the report is a practical reason to review reliance on model distribution platforms, cloud capacity and Nvidia-linked infrastructure while the proposed deal remains unresolved.