Nvidia agrees to buy Hugging Face for $12.9 billion in open-source AI bet

Nvidia has agreed to acquire Hugging Face for $12.9 billion, according to a report from The Information first cited by TechCrunch and CNBC. The deal has not yet been formally signed and could still fall through, but if completed, it would represent one of the largest acquisitions in AI history and a significant strategic pivot for the chipmaker.

Hugging Face is the de facto distribution layer for open-source AI. Founded in 2016, the platform hosts more than a million models and datasets, generating roughly $150 million in annualized revenue — up from around $100 million just two months earlier — and approaching profitability. Its last formal valuation was $4.5 billion, set during a $235 million Series C round in 2023. The proposed acquisition would value it at nearly three times that figure.

Why Nvidia is making this move

The strategic logic is defensive as much as offensive. Nvidia's chip business depends on developers and enterprises choosing its hardware. That calculus is shifting: OpenAI, Google, Amazon, and Anthropic are all designing custom silicon, potentially reducing their dependence on Nvidia GPUs. By acquiring Hugging Face — the platform where open-source developers discover, share, and deploy models — Nvidia could keep a vast segment of the AI developer community tightly bound to its ecosystem.

There is also a cloud computing angle. Hugging Face allows developers to rent compute to run their models. Nvidia scaled back its DGX Cloud service roughly a year ago, and the acquisition would hand it a ready-made outlet for selling compute capacity to the same open-source developers who already rely on the platform. It is a hedge: if proprietary labs shift away from Nvidia chips, the open-source community becomes the fallback market, and Hugging Face owns that community's infrastructure.

Open source and the China factor

Hugging Face CEO Clement Delangue has been outspoken about competitive pressure from Chinese open-source AI. In recent statements, he noted that China is 'clearly dominating' open-source AI development. An Nvidia acquisition could accelerate investment in Western open models — Nvidia has a direct financial interest in open-source AI flourishing, since open models run on commodity GPU clusters rather than proprietary inference chips.

Neither Nvidia nor Hugging Face responded to requests for comment at the time of reporting. A transaction of this size would face antitrust scrutiny in both the US and EU, where enforcement in AI has sharpened considerably over the past two years. As first reported by The Information and covered by TechCrunch, the deal reflects a broader industry reckoning: as the biggest labs build around Nvidia rather than on it, the company is moving to secure the software and distribution layer before a rival does.