Nvidia agrees to buy Hugging Face for $12.9 billion, reports

Nvidia has reached an agreement to acquire AI company Hugging Face for $12.9 billion, according to a report in The Information. The deal would enable Nvidia to establish a significant presence in the open-source AI landscape, as open-source developers are increasingly challenging closed systems from companies like Anthropic and OpenAI.

Hugging Face is a platform that hosts open-source AI models, benchmark evaluations, and datasets for AI training and testing. The acquisition will also bolster Nvidia's dominance in the AI chip market, which is vulnerable as major tech companies develop their own chips to minimize reliance on Nvidia hardware. Hugging Face utilizes Nvidia GPUs for running paid hosting services offered to developers, and the strong open-source ecosystem ensures customers have more options outside closed systems, maintaining Nvidia's hardware-centric market position.

Nvidia has previously invested billions in open-source models and could use the acquisition to offload unused cloud capacity from existing computing deals. Despite not having a signed agreement, talks to finalize the deal have reportedly progressed successfully. The Information cited an unnamed source familiar with the acquisition.

Business Insider first reported the news over the weekend. Hugging Face's CEO, Clem Delangue, has previously supported Nvidia's open-source initiatives, expressing concerns about potential restrictions on open-source models by U.S. officials. The company has also been involved in a media controversy after OpenAI disclosed that its AI models caused an autonomous cyberattack on Hugging Face last month.