Nvidia reportedly agreed to acquire open-source artificial intelligence platform Hugging Face for $12.9 billion, This could greatly expand the chipmaker’s influence beyond AI hardware and into the software ecosystem used to build and distribute AI models.
The Information reported the agreement on Wednesday, and referenced a person familiar with the deal. Neither Nvidia nor Hugging Face has publicly confirmed the transaction. If completed at the reported price, it would rank among Nvidia’s largest acquisitions ever.
The valuation is particularly striking. Hugging Face is generating more than $150 million in annualized revenue, which means that Nvidia would be paying roughly 86 times that figure. The company was valued at $4.5 billion in a 2023 funding round backed by Nvidia, Google and Salesforce, and Hugging Face reportedly rejected a Nvidia investment last year that would have valued it at $7 billion.
Why Nvidia Wants Hugging Face
Hugging Face has become one of the most important distribution layers in open-source AI, hosting models, datasets and developer tools used throughout the industry.
Owning the platform could give Nvidia a stronger position across the entire AI stack. The company already dominates AI compute through its GPUs and CUDA ecosystem, and now Hugging Face could deepen its reach to the point where developers discover, test, fine-tune and deploy models.
It could also become strategically important as Nvidia faces growing competition from custom AI chips being developed by companies including Google, Amazon and AI labs themselves. One potential issue will be whether Hugging Face can retain its hardware-neutral position while owned by the industry's dominant GPU supplier.
Nvidia Stock Rallies After Earnings
The acquisition report arrived alongside another catalyst for Nvidia stock. NVDA closed Wednesday at $209.66, down 1.59%, but the shares reversed course after the company's earnings report. Nvidia traded around $219.53 in extended trading after gaining roughly 4.7%.
Nvidia stock price (Source: CoinCodex)
Nvidia reported fiscal second-quarter revenue of $96.2 billion, up 106% year over year, while Data Center revenue surged 117% to $89 billion. The company expects approximately $108 billion in third-quarter revenue and has forecast revenue growth of around 70% for its next fiscal year.
The Hugging Face deal therefore looks less like a standalone acquisition and more like another piece of Nvidia's effort to own a larger portion of the infrastructure powering the AI economy.
