Nvidia (NASDAQ: NVDA) is reported to have agreed to acquire Hugging Face, the dominant public hub for open-source AI models, for $12.9 billion. The report landed the same day Nvidia posted record second-quarter results, reinforcing the strategic signal of a chipmaker doubling down on open-source distribution even as it tells investors AI demand is still accelerating. However, neither company has confirmed the deal, and the outlets covering the story do not agree on whether an agreement has actually been struck.
The Information first reported that Nvidia agreed to the purchase, citing a person familiar with the deal. Business Insider, which previously reported that Hugging Face was working with a bank to field takeover interest, described talks valuing the company at more than $13 billion that had not produced a signed agreement and could still fall apart. Bloomberg framed the story as talks Nvidia had discussed rather than a finalized deal. As of press time, the reports diverge, with no regulatory filing or statement from either company. Nvidia and Hugging Face did not respond to requests for comment.
Nvidia stock was trading around $225 in Thursday pre-market action, up roughly 7%, extending its post-earnings rally after Wednesday's beat-and-raise. The move was driven by earnings rather than the unconfirmed Hugging Face report.
Hugging Face, founded in 2016 and based in New York, operates the infrastructure of the open-source AI ecosystem: a model hub, datasets library, the Transformers library, and Spaces for demos. The Information reported Hugging Face generates about $150 million a year in revenue, up from roughly $100 million two months earlier, with its CEO stating the company is close to profitability. At $12.9 billion, the reported price equals about 86 times revenue.
Nvidia joined a $235 million round in 2023 that valued Hugging Face at $4.5 billion. Late last year, Hugging Face reportedly turned down a $500 million Nvidia investment that would have valued it at $7 billion, saying it did not want a dominant investor able to sway its decisions. If completed, this would be one of Nvidia's largest acquisitions, exceeding its $7 billion Mellanox deal but remaining far below the roughly $40 billion Arm bid Nvidia abandoned in 2022.
The strategic logic is vertical integration. Nvidia already controls the dominant AI compute layer through GPUs and CUDA, with record quarterly revenue of $96.2 billion and $366 billion in future commitments. Owning Hugging Face would give Nvidia control of the distribution layer where developers pull open-weight models, datasets, and tooling. This could help counter the custom-silicon push from OpenAI, Google, Amazon, and Anthropic, and also position Nvidia as the default route for open models competing with Chinese labs such as Z.ai and Alibaba's Qwen.
Still, significant risks remain. Hugging Face's value rests on hosting competing models and supporting rival hardware from Google, Amazon, Microsoft, and AMD. A dominant chip vendor owning that neutral hub could face antitrust scrutiny, with Nvidia's abandoned Arm deal as a precedent. Developer trust and open-source contributor retention are also concerns. The direction of travel is nonetheless clear: AI infrastructure platforms are being absorbed into larger companies, as shown by Stripe's $7 billion-plus purchase of OpenRouter this month.
The near-term tell is an on-record confirmation or denial from Nvidia or Hugging Face. Until then, the $12.9 billion figure should be treated as a reported number at a contested stage, not a done deal.
