Nvidia agrees to acquire Hugging Face for $13B

Nvidia has been in discussions to acquire Hugging Face, a popular open-source AI platform, for over $13 billion, according to a person familiar with the matter. The two companies have not yet reached an agreement, and the talks remain fluid, the source said.

Hugging Face, founded in 2016 by Clément Delangue, Julien Chaumond, and Thomas Wolf, hosts millions of AI models and datasets used by developers for building applications. The platform is neutral and supports models and hardware from various industry players, including Nvidia's competitors, AMD and Intel.

Nvidia has been actively engaging in dealmaking with its substantial cash reserves. The company has committed $18 billion to equity investments for the remainder of its fiscal year, in addition to its existing $47.9 billion portfolio of private companies. Microsoft also met with Hugging Face, but the discussions are reportedly not ongoing.

While Nvidia has previously participated in Hugging Face's $235 million funding round in 2023, valuing the platform at $4.5 billion, the company turned down a $500 million investment offer from Hugging Face late last year, which would have valued it at $7 billion. Hugging Face had expressed a preference for avoiding a dominant investor that could influence its decision-making process.

The acquisition of Hugging Face by Nvidia could potentially grant the chipmaker greater influence over developers utilizing the platform, as well as drive more workloads to Nvidia's hardware. However, the acquisition might also complicate Hugging Face's neutrality, given that the platform accommodates models and hardware from multiple competitors.