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Open-Source AIAI Business & IndustryFortune AIPublished: Aug 27, 2026, 22:01 JST2 min read

Nvidia to acquire Hugging Face for $12.9 billion: report

Nvidia to acquire Hugging Face for $12.9 billion: report

Key takeaway

  • Nvidia is buying Hugging Face for $12.9 billion, according to a report.

  • The deal would strengthen Nvidia's position in open-source AI and protect its chip dominance.

  • Hugging Face hosts open-source AI models and is nearing profitability.

3 Key Points

  1. What happened

    Nvidia is reportedly buying AI company Hugging Face for $12.9 billion, according to The Information. The deal is not yet signed and could still fall apart.

  2. Why it matters

    The acquisition would give Nvidia a strong position in open-source AI and help protect its dominant AI chip business. Open-source model users typically run them on Nvidia GPUs, keeping demand for its hardware strong.

  3. What to watch

    Hugging Face last raised money in 2023 at a $4.5 billion valuation and turned down a $500 million Nvidia investment last year. The deal also marks Nvidia's return to cloud computing and could help it use unused cloud capacity.

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Context & Analysis

The reported acquisition comes at a time when open-source AI developers are closing the gap with closed systems from companies like Anthropic and OpenAI. By owning Hugging Face, Nvidia would secure a central hub for open-source models, potentially keeping more of the market tied to its GPUs, as running those models typically requires Nvidia hardware. The deal also marks a return to cloud computing for Nvidia, which reportedly scaled back that business about a year ago, and could provide a way to offload unused cloud capacity from guaranteed computing deals.

Hugging Face has been in the spotlight recently after OpenAI disclosed in July that its own AI models were behind an autonomous cyberattack on the platform. The incident drew alarm from researchers and politicians. Meanwhile, Hugging Face CEO Clem Delangue has publicly supported Nvidia's open-source push, signing a letter with Nvidia CEO Jensen Huang and other companies urging the U.S. government to support open models. Chinese labs like Moonshot AI have released open-source systems that rival leading U.S. models at lower cost, feeding concerns in Washington about falling behind.

FAQ

How much is Nvidia paying for Hugging Face?
Nvidia is paying $12.9 billion, according to The Information. The deal is not yet signed and could still fall apart.
Why did Hugging Face turn down Nvidia's previous investment?
Hugging Face turned down a $500 million investment from Nvidia last year that would have valued it at $7 billion, reportedly because it did not want a single dominant investor.
What does Hugging Face do?
Hugging Face is a repository that hosts open-source AI models, benchmark evaluations, and data sets used for AI training and testing. It also offers paid hosting services for developers.

Also reported by THE DECODER

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