Nvidia has agreed to acquire Hugging Face, a leading open-source AI platform, for $12.9 billion, according to a report from The Information on August 26. The deal, if finalized, would mark one of Nvidia’s largest acquisitions to date and expand its influence in the AI software ecosystem.
Hugging Face, which hosts and collaborates on large language models and datasets, did not immediately respond to requests for comment. Nvidia also declined to confirm the report outside regular business hours.
The agreement follows unverified reports from Business Insider on August 26 suggesting Nvidia had been in talks to acquire Hugging Face for more than $13 billion. The discussions were described as ongoing, with no guarantee of a finalized deal. CNBC separately reported that Nvidia had been evaluating potential acquisition interest in Hugging Face, which has been working with a bank to assess bids.
Nvidia’s reported revenue forecast of a 70% jump next fiscal year underscores the strong demand for AI computing, a trend that may have driven the chipmaker’s expansion into software platforms. The company also disclosed $18 billion in committed equity investments through 2027, adding to its existing $47.9 billion in private company holdings.
Background and Prior Involvement
Nvidia has had a prior financial relationship with Hugging Face, participating in a $235 million funding round in 2023 that valued the company at $4.5 billion. In late 2023, Hugging Face reportedly rejected a $500 million investment offer from Nvidia, which would have valued it at $7 billion. At the time, Hugging Face stated it did not want a dominant investor that could influence its decisions.
Hugging Face operates as a central hub for open-source AI models and datasets, enabling developers to build, test, and share tools. Its platform supports models and hardware from across the industry, including competitors like AMD and Intel, a feature that has contributed to its reputation for neutrality.
Strategic Implications
If completed, the acquisition would place Hugging Face under Nvidia’s ownership, potentially driving more AI workloads onto its chips. Analysts suggest the deal aligns with Nvidia’s strategy to integrate vertically across the AI stack, from hardware to foundational models and applications.
Siddy Jobe, a fund manager at Eonopolis Exponential Technologies, noted that Nvidia’s approach does not favor closed or open-source models, positioning Hugging Face as a strategic fit. "I think Nvidia is very much a community, a platform-based company, and in that respect, I think Hugging Face fits perfectly within that," Jobe told CNBC.
The reported acquisition comes amid Nvidia’s broader expansion in AI, including a $20 billion licensing deal with Groq earlier this year. The company’s financial disclosures indicate a continued push to solidify its dominance in the AI ecosystem through both investments and acquisitions.