Nvidia’s Hugging Face Bet Is Huge—But the Deal May Not Be Done

Nvidia’s Hugging Face Bet Is Huge—But the Deal May Not Be Done
Nvidia may be on the verge of buying one of open-source AI’s most important gathering places—but the difference between a completed deal and active negotiations remains crucial.

The story began with reports over the weekend that Hugging Face was drawing takeover interest. By Wednesday, The Information had reported that Nvidia had agreed to pay $12.9 billion, while Business Insider’s later account said the companies were still talking and had not signed anything. One report describes a finish line; the other leaves room for the talks to collapse. “The talks … had not yet produced a signed agreement and could still atomize.”

That uncertainty matters because Hugging Face is far more than another AI startup. Founded in 2016, it has become a central repository for models, datasets and benchmarks used by developers. A takeover would give Nvidia a deeper stake in open-source AI just as companies including OpenAI, Google, Amazon and Anthropic pursue their own chips to reduce their dependence on Nvidia hardware. “A strong open-source ecosystem gives customers more options outside the closed labs and keeps more of the market tied to Nvidia’s hardware.”

The potential purchase also tracks Nvidia’s wider strategic needs. Hugging Face’s paid hosting operations could offer Nvidia a route back into cloud services and a way to place surplus computing capacity tied to the company’s customer commitments. It would also bring together two companies that have publicly advocated for open models while Washington weighs possible restrictions.

The price would be a dramatic escalation. Hugging Face was valued at $4.5 billion in a 2023 funding round and reportedly rejected a $500 million Nvidia investment last year that valued it at $7 billion, wary of a single dominant investor. Its revenue, reported at roughly $150 million annually, makes a near-$13 billion exit especially striking.

For now, Nvidia’s strategic logic is clear; the finality of the transaction is not. Nvidia and Hugging Face had not publicly confirmed the reports, and one account cautioned that the deal could still fail.

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