Nvidia closes in on Hugging Face acquisition

Nvidia has agreed to acquire Hugging Face for $12.9 billion, as reported by The Information. Business Insider and TechCrunch previously reported on the takeover interest, but neither company has yet confirmed the deal. Hugging Face, founded in 2016, is a popular hub for developers sharing and downloading open-source AI models. The acquisition would give Nvidia a strong position in the open-source AI landscape, as closed-source AI systems from companies like Anthropic and OpenAI are catching up to Hugging Face.

This move could help Nvidia protect its dominance in AI chips, which are increasingly at risk due to closed AI labs building their own chips to reduce reliance on Nvidia. Additionally, a thriving ecosystem of open-source AI models provides customers with more alternatives, maintaining market dependency on Nvidia's hardware. Nvidia has also been investing heavily in open-source AI models and recently pledged to help cover costs for cloud computing deals for its customers.

This deal would be a significant jump from Hugging Face's previous valuation of $4.5 billion, as it raised $235 million in 2023. Hugging Face CEO Clem Delangue has been publicly aligned with Nvidia's open-source push, and the company is still generating about $150 million in revenue annually, nearing profitability.