Nvidia has agreed to buy Hugging Face for $12.9 billion, reported Wednesday night, citing a source familiar with the matter., which first reported over the weekend that Hugging Face was fielding takeover interest, said Wednesday night that the talks — which would value the company at more than $13 billion — had not yet produced a signed agreement and could still fall apart.
Neither company has responded to requests for comment. Nvidia's silence is particularly noteworthy as the company has moved quickly in the past to address reports it considers inaccurate.
What's new
- Reported purchase price: $12.9 billion, per; cites a valuation above $13 billion.
- No signed agreement yet; talks could still atomize,.
- Hugging Face's last known valuation was $4.5 billion from a 2023 funding round led by Salesforce Ventures, with participation from Alphabet's GV, IBM Ventures, and Nvidia itself.
- The startup recently generated about $150 million in annual revenue, up from roughly $100 million two months earlier, and is "close to profitability," CEO Clem Delangue said last month.
- Hugging Face turned down a $500 million investment offer from Nvidia late last year that would have valued it at $7 billion, the previously reported.
Why it matters
Buying Hugging Face would give Nvidia a strong foothold in open-source AI at a moment when open-source developers are racing to catch up to closed systems from Anthropic and OpenAI. A thriving open-source ecosystem gives customers more alternatives to those closed labs, which in turn keeps more of the market dependent on Nvidia's hardware. That dynamic matters because the biggest closed-source AI labs — OpenAI, Google, Amazon, and Anthropic — are all building their own AI chips to lessen reliance on Nvidia.
The deal would also mark a comeback for Nvidia in cloud computing. The company reportedly scaled back its DGX Cloud business about a year ago. Owning Hugging Face — which already helps developers run AI models using rented computing power — could give Nvidia a way back into that market without starting from scratch. There's also a financial safety net: Nvidia has promised to help cover the cost of tens of billions of dollars in cloud computing deals for its customers. If those customers don't use all the capacity they signed up for, Nvidia could get stuck with it. Owning Hugging Face would let Nvidia sell that unused capacity to Hugging Face's customers.
Meanwhile, the AI infrastructure consolidation wave continues. Stripe recently acquired OpenRouter for more than $7 billion, a startup valued at just $1.3 billion in May. That deal signals rising strategic value for model-routing and deployment layers — exactly the layer Hugging Face occupies.
Our take
The reported price near $13 billion implies a massive revenue multiple for a company generating roughly $150 million annually. That premium reflects strategic value — control of the central open-source model hub — more than current financials. Whether the deal closes at these terms remains uncertain; 's reporting that no agreement is signed yet and talks could still collapse is a meaningful caveat. If it closes, Nvidia gains both a cloud distribution channel and a lever to keep open-source AI dependent on its silicon.
