Reports indicate Nvidia has agreed to acquire Hugging Face for about $12.9 billion, with some sources valuing the deal at more than $13 billion. Those reports also say no signed purchase agreement had been confirmed at the time and the talks could still falter.
Deal details and strategic rationale
Observers say owning Hugging Face would give Nvidia a stronger foothold in the open-source AI ecosystem, where developers share and download models. The acquisition is framed as a way to support demand for Nvidia’s AI chips by encouraging alternatives to closed-source models developed by companies such as Anthropic and OpenAI.
Analysts quoted in the reporting suggested the move could help protect Nvidia’s chip market position as large AI labs pursue custom hardware. Nvidia has also invested in open-source model development itself, and the reported purchase of Hugging Face would align with that effort.
Hugging Face CEO Clem Delangue has publicly backed open-model initiatives this year and has cited Nvidia technology in recent interviews. The company was among signatories to a letter led by Nvidia CEO Jensen Huang and 24 other firms urging U.S. support for open models rather than restrictions.
Cloud, revenue and prior offers
Reports note the deal could also give Nvidia a route back into cloud computing without restarting a cloud business from scratch. Hugging Face helps developers run models using rented compute, which could allow Nvidia to monetize unused cloud commitments tied to large customer contracts.
Hugging Face’s valuation under the reported terms would be a large leap from prior financing. The company raised $235 million in 2023 at a $4.5 billion valuation. It reportedly turned down a $500 million investment late last year that would have valued it at $7 billion.
Recent figures cited in the reports put Hugging Face’s annual revenue at roughly $150 million, up from about $100 million a few months earlier, and the company was founded in 2016. Other transactions noted in the context include Stripe’s reported acquisition of OpenRouter, which drew attention for its own sizable price relative to earlier valuations.
Original source: TechCrunch AI