NVIDIA reportedly agrees to acquire Hugging Face for $12.9 billion

NVIDIA has agreed to acquire Hugging Face for $12.9 billion, The Information reports, according to coverage from Chinese outlet QbitAI — a deal that has not yet reached a formal agreement and still carries uncertainty. Microsoft had also met with Hugging Face about an acquisition, but those talks failed, the reports say. Rumors of a major buyer circulated over the past weekend before the purchaser's identity surfaced. TechCrunch had separately reported that NVIDIA was closing in on the acquisition. NVIDIA already knows the company well: it was an investor in Hugging Face's $235 million Series D in 2023, a round led by Salesforce Ventures with Google, Amazon, Intel, and AMD participating, at a post-money valuation of $4.5 billion. The reported $12.9 billion price would roughly triple that valuation in about three years. The deal also has a twist: according to the Financial Times, Hugging Face turned down a $500 million investment from NVIDIA late last year at a $7 billion valuation, saying it did not want a dominant shareholder steering company decisions — only to now reportedly sell outright. Two months ago, the company's annual recurring revenue was only around $100 million. Founded in 2016 as a chatbot app, Hugging Face pivoted into open-source model hosting and became known as the GitHub of AI, hosting more than 3 million open models and more than 1 million datasets and serving as the de facto home for open-source AI teams worldwide. For NVIDIA, the logic is strategic: closed-source labs including OpenAI, Google, Amazon, and Anthropic are building their own chips to reduce dependence on NVIDIA. A thriving open-source ecosystem offers an alternative to closed models and keeps training and inference workloads on NVIDIA hardware, the same playbook Google used with free Android to pull ecosystems onto its hardware. Cloud and balance-sheet math also matter: The Information notes NVIDIA scaled back DGX Cloud roughly a year ago, and Hugging Face already helps developers run models on rented compute. With NVIDIA committed to absorbing hundreds of billions in cloud contract costs for customers, owning Hugging Face would let it resell unused capacity to the platform's customers — and its latest quarterly revenue of $96.2 billion makes the price tag a manageable one. What to watch: whether the deal reaches a formal agreement and clears regulatory review, and how the open-source community reacts to the platform changing hands — a move that would cement NVIDIA's position as the leading open-source AI company in the U.S.