Nvidia has reportedly agreed to acquire Hugging Face, the popular open-source AI model hub, for $12.9 billion, according to The Information, which cited a source familiar with the matter. Business Insider, which first reported over the weekend that Hugging Face was fielding acquisition interest, said late Wednesday that talks, which would value the company above $13 billion, had not yet produced a signed agreement and could still fall apart. Neither Nvidia nor Hugging Face has responded to requests for comment.
Why Nvidia Wants Hugging Face
Founded in 2016, Hugging Face is one of the most widely used hubs where developers share and download open-source AI models. Acquiring it would give Nvidia a strong foothold in open-source AI at a moment when open developers are racing to catch up with closed systems from Anthropic and OpenAI.
The strategic logic centers on protecting Nvidia’s core business: chip dominance. Nearly every major closed-source AI lab, OpenAI, Google, Amazon, and Anthropic, is now building its own AI chips to reduce reliance on Nvidia hardware. A thriving open-source AI ecosystem gives customers more alternatives to those closed labs, which in turn keeps a larger share of the market dependent on Nvidia’s chips rather than a rival’s custom silicon. Nvidia has already poured tens of billions of dollars into building its own open-source AI models for the same reason.
A Cloud Comeback, Too
The deal would also mark a return to cloud computing for Nvidia, which scaled back its DGX Cloud business roughly a year ago. Hugging Face already helps developers run AI models using rented computing power, giving Nvidia a path back into that market without starting from scratch. There’s also a financial safety net: Nvidia has committed to help cover tens of billions of dollars in cloud computing deals for its customers, and if those customers don’t use all the capacity they’ve signed up for, Nvidia could get stuck with it. Owning Hugging Face would let Nvidia resell that unused capacity to Hugging Face’s own customer base.
The Politics Behind the Timing
Hugging Face CEO Clément Delangue has spent much of 2026 publicly aligned with Nvidia’s push for open-weight AI, amid a Washington debate over whether to restrict open-source models on national security grounds. After Chinese labs like Moonshot AI released systems such as Kimi K3 that matched leading U.S. models on benchmarks at a fraction of the cost, concern grew in Washington, though some critics of closed labs, including White House adviser David Sacks, have suggested that fear is partly fanned by the “duopoly” of Anthropic and OpenAI.
Delangue has publicly cited a letter signed by Nvidia CEO Jensen Huang and 24 other companies urging the U.S. government to support, rather than restrict, open models, and has said Hugging Face used an Nvidia-modified Chinese open-source model to defend itself following a cyberattack earlier this year.
Not Nvidia’s First Offer
This wouldn’t be Nvidia’s first attempt to buy into Hugging Face. The company turned down a $500 million investment offer from Nvidia late last year that would have valued it at $7 billion, according to the Financial Times, reportedly because Hugging Face didn’t want a dominant investor able to sway its decisions. A full buyout avoids that dynamic while still giving Hugging Face access to Nvidia’s much deeper resources.
Hugging Face’s revenue has grown quickly but remains modest relative to the reported price: The Information reported the company was recently generating about $150 million a year, up from roughly $100 million just two months earlier, a growth rate that has brought it “close to profitability,” according to Delangue.
Part of a Broader Consolidation Wave
The reported deal follows Stripe’s acquisition of AI model routing startup OpenRouter for more than $7 billion earlier this month, a company valued at just $1.3 billion in its Series B round in May. Together, the two deals suggest AI infrastructure intermediaries, companies that sit between model developers and the businesses using them, are increasingly being absorbed by larger players with deep capital reserves rather than remaining independent.
Why It Matters
If finalized, the deal would be one of the largest acquisitions in AI infrastructure history and would hand Nvidia direct influence over the most widely used distribution channel for open-source AI models, at a moment when open-weight competition, especially from Chinese labs, is reshaping the competitive landscape. For developers who rely on Hugging Face, the acquisition raises questions about independence and neutrality that will likely shape how the platform is perceived going forward.
For continuing coverage of AI industry acquisitions and the companies shaping AI infrastructure, keep following Tech News Reports for ongoing updates.
