Nvidia reportedly in talks to acquire Hugging Face for $12.9 billion

Nvidia is said to be negotiating the acquisition of Hugging Face, the open-source AI model repository, in a transaction that could value the company at roughly $13 billion, according to a report from The Information. The deal, if completed, would give Nvidia a stronger foothold in the open-source AI ecosystem and provide a pathway back into cloud-computing services that the chipmaker scaled back a year ago.

Hugging Face, founded in 2016, hosts a large library of models that developers can share and download. Its CEO Clem Delangue has recently aligned the firm with Nvidia’s open-source initiatives, citing a joint letter signed by Nvidia’s chief executive Jensen Huang and dozens of other companies urging U.S. policymakers to support open models rather than restrict them. Delangue also told CBS’s “Face the Nation” that Hugging Face used an Nvidia-modified version of a Chinese open-source model to defend against a cyberattack, and warned in a CNBC interview that China is “clearly dominating” open-source AI.

Analysts note that the proposed price represents a significant increase from Hugging Face’s last disclosed valuation of $4.5 billion after a 2023 funding round. The company reported annual revenue of about $150 million, up from $100 million two months earlier, and said it is approaching profitability. A purchase at this scale would provide Hugging Face with Nvidia’s financial resources and could allow Nvidia to monetize unused cloud capacity by offering it to Hugging Face’s customers.

Both Nvidia and Hugging Face declined to comment on the reported talks. The Information indicated that no definitive agreement has been signed and the negotiations could still fall apart.