The Information reported Wednesday night that Nvidia has agreed to buy Hugging Face for $12.9 billion, citing a source familiar with the matter. Business Insider — which first reported over the weekend that Hugging Face was receiving takeover interest — later noted the talks, which would value the company at more than $13 billion, have not yet produced a signed agreement and could still collapse.
TechCrunch contacted both Nvidia and Hugging Face for comment; neither had responded at the time of reporting. Nvidia’s silence is notable given the company’s past quick responses to reports it considered inaccurate.
Why the acquisition would matter
Founded in 2016, Hugging Face is a widely used hub where developers share and download open-source AI models. Acquiring it would give Nvidia a stronger position in the open-source AI ecosystem at a moment when open-source projects are working to catch up with closed models from companies such as Anthropic and OpenAI.
Strategically, the move can be seen as protecting Nvidia’s dominance in AI chips. Major closed-source AI labs (OpenAI, Google, Amazon, and Anthropic) are developing their own processors to reduce dependence on Nvidia hardware. A healthy open-source model ecosystem provides customers with alternatives to those closed labs, which helps sustain demand for Nvidia’s chips. Nvidia has already invested tens of billions of dollars into building its own open-source AI models.
Political alignment and public statements
Clem Delangue, CEO of Hugging Face, has publicly aligned with Nvidia’s push for open models during a period of debate in Washington about potential restrictions on open-weight models. U.S. officials have discussed national-security concerns after some foreign labs released systems (for example Moonshot AI’s Kimi K3) that matched leading U.S. models on benchmarks while operating at lower cost.
Delangue appeared on CBS’s Face the Nation earlier this month and said Hugging Face used an Nvidia-modified version of a Chinese open-source model to defend itself after a cyberattack. He also referenced a recent letter signed by Jensen Huang, Nvidia’s CEO, and 24 other companies — including Hugging Face — urging the U.S. government to support open models rather than restrict them. In a late-July CNBC interview, Delangue made similar points and warned that China is “clearly dominating” in open-source AI.
Cloud strategy and financial mechanics
The acquisition could also provide Nvidia a path back into cloud computing. Nvidia reportedly scaled back its DGX Cloud business about a year ago. Owning Hugging Face — which already helps developers run models using rented compute — could allow Nvidia to re-enter the market without rebuilding from scratch.
There is also a financial angle: Nvidia has committed to covering tens of billions of dollars in cloud-compute deals for customers. If clients fail to use all the reserved compute, Nvidia can be left holding unused capacity. Hugging Face’s customer base could become a channel to sell that excess capacity.
Price, prior funding and revenue
A $12.9 billion price represents a large increase over Hugging Face’s last known valuation. In 2023, the company raised $235 million in a funding round that valued it at $4.5 billion; that round was led by Salesforce Ventures and included participation from Alphabet’s GV, IBM Ventures and Nvidia.
The Financial Times previously reported that Hugging Face rejected a $500 million investment offer from Nvidia late last year that would have valued it at $7 billion; at the time the company said it did not want a dominant investor who could sway its decisions.
According to The Information, Hugging Face was recently generating about $150 million a year in revenue, up from roughly $100 million two months earlier. Clem Delangue told TechCrunch last month that this growth had brought the company “close to profitability.” Nonetheless, a near-$13 billion purchase price would be a very large multiple given the company’s revenue size.
Market context
The potential deal would come as consolidation and competition pick up in AI infrastructure and model services. Other firms are also acquiring model-selection and delivery startups: for example, OpenRouter — founded in early 2023 to help customers choose among models for different tasks and budgets — was valued at about $1.3 billion in May at its Series B, and Stripe reportedly paid more than $7 billion to acquire it earlier this month.
Current status
Crucially, reports emphasize there is no signed agreement yet and talks could still break down. If completed, the transaction would substantially affect open-source AI and the AI hardware market; if it does not materialize, both companies will likely continue along separate strategic paths.
