Nvidia has agreed to acquire artificial intelligence platform Hugging Face for $12.9 billion, according to a report by The Information, in what would be one of the chipmaker’s biggest acquisitions and a major expansion of its presence in the open-source AI ecosystem. The report cited a person with knowledge of the agreement. 

Hugging Face operates a widely used platform where developers and researchers share and access open-source AI models, datasets and related tools. A deal would give Nvidia greater reach into the software and developer side of AI at a time when the industry is increasingly divided between open models and proprietary systems developed by companies such as OpenAI and Anthropic.

Nvidia Expands Beyond AI Chips

Nvidia has built its dominance in artificial intelligence primarily through its graphics processing units (GPUs), which power many of the world's AI systems. The reported Hugging Face acquisition would broaden that strategy by giving the company control of a major platform used by developers building and deploying AI models.

The Information reported that Nvidia sees the continued development of successful open models as important to maintaining demand for its hardware. The company has also been developing its own open-source AI models under the Nemotron brand.

Hugging Face's Growing Importance

Founded in 2016, Hugging Face has become a central platform for the open-source AI community. Its repository allows developers to share models and datasets and collaborate on machine-learning projects.

The company was valued at $4.5 billion during a $235 million funding round in 2023. Nvidia participated in that funding round along with other major technology companies, including Google and Salesforce. 

The reported $12.9 billion acquisition price would therefore represent a substantial increase over Hugging Face's previous private-market valuation.

Earlier Nvidia Investment Offer

The latest development follows an earlier attempt by Nvidia to deepen its financial relationship with Hugging Face.

According to the Financial Times, Hugging Face rejected a $500 million investment proposal from Nvidia last year that would have valued the company at around $7 billion. Nvidia subsequently remained an investor in the company through its 2023 funding round. (The Economic Times)

The reported acquisition would take that relationship much further by potentially bringing Hugging Face under Nvidia's ownership.

AI Demand Remains Strong

The proposed deal comes as Nvidia continues to signal strong demand for AI computing. The company recently forecast a 70% increase in revenue for the next fiscal year, reinforcing expectations that spending on AI infrastructure will remain elevated.

Nvidia has also said it has $18 billion committed to equity investments through fiscal 2027, indicating that acquisitions and strategic investments remain an important part of its broader AI strategy. 

Deal Still Needs Confirmation

While The Information reported that an agreement has been reached, the transaction had not been publicly confirmed by Nvidia or Hugging Face at the time of reporting. Reuters said both companies did not immediately respond to requests for comment outside regular business hours. 

That distinction is important because other reports have described the situation as acquisition talks rather than a completed agreement. Business Insider, for instance, reported that discussions were still ongoing and could potentially fall apart. 

If completed, the transaction would give Nvidia a significantly stronger position across the AI stack, extending its influence from computing hardware into one of the most important communities for open-source AI development.