Nvidia Reportedly Agrees to Acquire Hugging Face for $12.9 Billion

Nvidia has agreed to acquire artificial-intelligence company Hugging Face for $12.9 billion, according to a report by The Information, in what would be one of the chipmaker's largest acquisitions and a major expansion of its presence in open-source AI.

Nvidia is reportedly acquiring Hugging Face in a $12.9 billion deal that would give the chipmaker greater influence over the open-source AI ecosystem. [Image: NVIDIA]

Hugging Face operates a widely used platform where developers and researchers share open-source AI models, datasets and tools.

Reuters reported that Nvidia had agreed to the $12.9 billion transaction, citing a person familiar with the deal.

The acquisition would give Nvidia a much larger presence in open-source AI at a time when developers are increasingly using open models alongside proprietary systems from companies such as Anthropic and OpenAI.

It would also deepen Nvidia's position across the AI technology stack. Nvidia dominates the market for AI accelerators, while Hugging Face provides a platform used by developers to discover, download, test and deploy AI models.

Hugging Face already offers paid hosting and computing services that allow developers to run models using rented computing resources.

An acquisition could therefore give Nvidia a larger role in AI cloud services and provide a potential outlet for unused computing capacity tied to Nvidia's own cloud commitments, according to reporting cited by TechCrunch.

The reported deal would represent a sharp increase from Hugging Face's last publicly known valuation.

The company raised $235 million in 2023 at a valuation of $4.5 billion. Nvidia participated in that financing round.

Hugging Face also reportedly rejected a $500 million investment from Nvidia late last year that would have valued the company at about $7 billion, in part because it did not want a dominant investor to influence its strategic decisions.

The acquisition would strengthen Nvidia's position in open-source AI but could also raise questions about neutrality and competition because Hugging Face hosts models and tools that run on hardware and software from Nvidia's competitors.

As of the reporting on the transaction, neither Nvidia nor Hugging Face had publicly confirmed the deal.

Some reports said the companies had reached an agreement, while other reporting indicated that the transaction had not yet been formally signed.