Nvidia Agrees to Acquire Hugging Face for $12.9 Billion

Nvidia has agreed to buy Hugging Face, the open-source AI model repository, for $12.9 billion according to The Information.

The Information reported the agreed acquisition price and its significance for Nvidia. The deal would mark one of Nvidia's largest acquisitions to date. It underscores how the Jensen Huang-led company at the center of the AI boom is betting that demand for the technology is expanding rather than peaking.

Hugging Face would give Nvidia control of a key open-source AI hub. The New York-based platform hosts open-source large language models and datasets. The acquisition comes at a time when builders of closed-source models such as Anthropic and OpenAI are seeking to create their own chips as an alternative to Nvidia's graphics processing units.

The $12.9 billion price tag stands in contrast to Hugging Face's revenue. The company reported annualized revenue of $150 million earlier this week according to The Information. That figure is up from roughly $100 million just two months earlier.

Prior investment and valuation history shaped the talks. Nvidia was among companies such as Salesforce and Alphabet's Google that backed Hugging Face in a $235 million funding round in 2023. That round valued the company at $4.5 billion. In January the Financial Times reported that Hugging Face rejected a $500 million investment offer from Nvidia last year that would have valued it at $7 billion.

Deal talks followed interest from another suitor. Business Insider first reported over the weekend that Hugging Face was fielding takeover interest. It later reported that the talks had not yet produced a signed agreement and could still fall apart. CNBC reported that talks began after Hugging Face received acquisition interest from another suitor and had been working with a bank to evaluate bidders.

Nvidia's broader AI strategy includes recent earnings and investments. On Wednesday Nvidia forecast a 70% jump in revenue next fiscal year. It also said it has $18 billion committed to equity investments through fiscal year 2027. The chipmaker has made a series of deals in the past year including a $20 billion licensing deal with AI chip startup Groq.