Nvidia reportedly agrees to buy Hugging Face for $12.9 billion

Nvidia has reportedly agreed to buy Hugging Face, the popular open-source AI model hub, for $12.9 billion, according to a Wednesday night report from The Information citing a source familiar with the matter, as relayed by TechCrunch. Founded in 2016, Hugging Face is one of the most widely used platforms where developers share and download open-source AI models, and the deal would hand Nvidia a strong foothold in the open-source AI world.

The report comes with caveats. Business Insider, which first reported over the weekend that Hugging Face was fielding takeover interest, said Wednesday night that talks valuing the company at more than $13 billion had not yet produced a signed agreement and could still fall apart. Neither Nvidia nor Hugging Face had responded to TechCrunch's requests for comment.

The acquisition would most obviously serve to protect Nvidia's dominance in AI chips. OpenAI, Google, Amazon, and Anthropic are all building their own chips to reduce reliance on Nvidia. A thriving open-source ecosystem gives customers alternatives to those closed labs — keeping more of the market dependent on Nvidia hardware. That is also why Nvidia has already poured tens of billions of dollars into building its own open-source AI models.

The deal would also mark a comeback in cloud computing. Nvidia scaled back its DGX Cloud business about a year ago, and Hugging Face — which already helps developers run models on rented compute — could give Nvidia a way back into that market. There is also a financial safety net: Nvidia has promised to help cover tens of billions of dollars in cloud deals for customers, and Hugging Face's users could absorb capacity those customers leave unused.

The price is a huge jump from Hugging Face's last known valuation of $4.5 billion from its $235 million round in 2023. The Information reported the company is generating about $150 million in annual revenue, up from roughly $100 million two months earlier, and CEO Clem Delangue told TechCrunch last month that it is "close to profitability." Nvidia's earlier $500 million investment offer, which valued the company at $7 billion, was turned down late last year.

The move echoes a wave of consolidation in AI infrastructure, following Stripe's reported acquisition of the AI gateway startup OpenRouter for more than $7 billion earlier this month. Delangue has spent much of this year publicly aligned with Nvidia's open-source push, including a letter signed by Nvidia CEO Jensen Huang and 24 other companies urging the U.S. government to support open models rather than restrict them.

What to watch: whether a signed agreement materializes, how regulators and the open-source community react to Hugging Face losing its independence, and how Nvidia would weave the hub into its chip and cloud strategy.