Nvidia closes in on a $12.9B deal to buy Hugging Face

Nvidia has agreed to buy Hugging Face for $12.9 billion, The Information reported Wednesday night, citing a source familiar with the matter, TechCrunch reported. Business Insider, which first reported over the weekend that Hugging Face was fielding takeover interest, said the talks, which would value the company above $13 billion, hadn't produced a signed agreement yet and could still fall apart.

Nvidia and Hugging Face have both stayed silent since. Neither responded to a request for comment, and Nvidia's quiet is itself notable: the company has moved fast in the past to knock down reports it considered wrong.

Hugging Face, founded in 2016, is one of the most popular hubs where developers share and download open-source AI models. Owning it would give Nvidia a strong foothold in open-source AI at the exact moment open-source developers are racing to catch closed systems from Anthropic and OpenAI.

The motive traces back to chip dominance. Nvidia's position looks increasingly exposed despite its aggressive release schedule, since nearly every major closed-source lab, OpenAI, Google, Amazon, and Anthropic, is now building its own AI chips to cut reliance on Nvidia hardware. A thriving open-source ecosystem gives customers alternatives to those closed labs, and that in turn keeps more of the market dependent on Nvidia. It's the same logic behind the tens of billions Nvidia has already poured into building its own open-source models.

Hugging Face CEO Clem Delangue has spent much of this year publicly aligned with Nvidia's open-source push, as Washington weighed restrictions on open-weight models. Chinese labs like Moonshot AI released systems, including its Kimi K3 model, that matched leading U.S. models on benchmarks at a fraction of the cost, feeding competitive and national-security worries in Washington. White House advisor David Sacks argued those fears were being fanned by the "duopoly" of Anthropic and OpenAI.

Delangue made the stakes personal on CBS's "Face the Nation" earlier this month, saying Hugging Face used an Nvidia-modified version of a Chinese open-source model to defend itself after a cyberattack, the same breach Intokened covered when Alabama's attorney general subpoenaed OpenAI over rogue agents that hit Hugging Face's systems. Delangue also pointed to a recent letter, signed by Nvidia CEO Jensen Huang and 24 other companies including Hugging Face, urging Washington to support open models rather than restrict them, and repeated similar warnings in a CNBC interview in late July, calling China "clearly dominating" open-source AI.

The deal carries a cloud-computing angle too. Nvidia scaled back its own DGX Cloud business about a year ago, and owning Hugging Face, which already helps developers run models on rented compute, could hand it a path back into that market without rebuilding from scratch. It also offers a financial cushion: Nvidia has promised to help cover tens of billions in customer cloud commitments, and any unused capacity from those deals could get resold through Hugging Face.

• Reported acquisition price: $12.9 billion
• Hugging Face's prior valuation, 2023 funding round: $4.5 billion, on $235 million raised
• Rejected Nvidia offer, late last year: $500 million investment at a $7 billion valuation
• Hugging Face's recent annual revenue: about $150 million, up from roughly $100 million two months earlier

That rejected offer is worth remembering. Hugging Face said at the time it didn't want a dominant investor able to sway its decisions, and a full buyout changes that calculus: it's a different bet than taking on one giant backer while facing pressure to keep growing under someone else's terms. Revenue growth has pushed the company "close to profitability," Delangue said last month, but a price near $13 billion is still a steep multiple for a business this size.

Hugging Face isn't the only AI infrastructure player getting absorbed by a bigger balance sheet. Intokened covered a similar move when Stripe agreed to buy OpenRouter, a startup that helps developers route between AI models for different tasks and budgets. OpenRouter was valued at $1.3 billion in its Series B round in May; Stripe reportedly paid more than $7 billion to take it over earlier this month. Nvidia's much deeper pockets would give Hugging Face a similar jump in resources, if the deal closes.

Nothing here should be taken as financial advice — just information to consider.