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Nvidia agrees to buy Hugging Face for $12.9 billion, report says

Nvidia agrees to buy open-source AI platform Hugging Face for $12.9 billion, report says.

AI News Feed · 2026-08-27 19:00

The Information, citing a person with knowledge of the deal, reported the agreement late Wednesday. Business Insider, however, reported that talks had not yet produced a signed agreement and could still fall apart. Business Insider first reported over the weekend that Hugging Face was fielding takeover interest. Neither Nvidia nor Hugging Face responded to requests for comment.

Hugging Face, founded in 2016, is a central repository where developers collaborate, test and share open-source AI models. Buying it would give Nvidia a foothold in the open-source AI ecosystem while helping protect its dominance in AI chips. Major closed-source AI labs, including OpenAI, Google, Amazon and Anthropic, are developing their own chips to reduce reliance on Nvidia. A thriving open-source ecosystem offers customers an alternative to closed labs, keeping more of the market dependent on Nvidia's hardware.

The price represents a significant markup from Hugging Face's last funding round. The company raised $235 million in 2023 at a $4.5 billion valuation, with Nvidia among the investors. Hugging Face was recently generating about $150 million in annualized revenue, up from $100 million two months earlier, and CEO Clément Delangue said last month the company was close to profitability. The acquisition values the company at roughly 86 times revenue.

The deal would also give Nvidia a path back into cloud computing. Nvidia reportedly scaled back its DGX Cloud business about a year ago. Hugging Face already helps developers run AI models using rented computing power. Additionally, Nvidia has committed to covering tens of billions of dollars in cloud computing costs for customers; owning Hugging Face could let it sell unused capacity to Hugging Face's users.

This is not the first time Nvidia has approached Hugging Face. The startup previously turned down a $500 million investment from Nvidia late last year over concerns about a single dominant investor. A full acquisition could change that dynamic. The deal may face regulatory scrutiny over whether Nvidia could restrict access to the platform for competing chipmakers and cloud providers.

The acquisition news comes alongside Nvidia's blockbuster earnings, which featured a bullish revenue forecast for fiscal 2028 and eased concerns about AI spending momentum. Nvidia shares rose in premarket trading following the report.