Nvidia Agrees to Acquire Hugging Face For $12.9 Billion In One of Its Largest Acquisitions So Far As It Expands Control Of Open-Source AI Models: Report

Nvidia Corp. (NASDAQ:NVDA) has reportedly agreed to acquire Hugging Face, an open-source AI model repository, for a staggering $12.9 billion.

This acquisition will provide Nvidia with control over Hugging Face, a platform known for hosting open-source large language models and datasets, The Information reported late Wednesday. This would be one of the largest acquisitions made by Nvidia so far, behind the $20 billion Groq acquisition.

The deal’s valuation is significantly higher than the New York-based startup’s $150 million annualized revenue, as reported by the publication earlier this week.

Nvidia was among the investors in Hugging Face’s $235 million funding round in 2023, along with Salesforce Inc. (NYSE:CRM) and Alphabet Inc.‘s Google (NASDAQ:GOOGL) (NASDAQ:GOOG), which valued the AI startup at $4.5 billion.

This development is particularly noteworthy as closed-source model builders like Anthropic and OpenAI are exploring alternatives to Nvidia’s graphics processing units. This acquisition could be one of the largest by Nvidia so far, as per reports.

Nvidia and Hugging Face did not immediately respond to Benzinga’s request for comments.

Hugging Face Emerges As Key AI Target

Earlier this year, the Financial Times reported that Hugging Face rejected a proposed $500 million investment from Nvidia late last year that would have valued the AI startup at $7 billion. The company said it wanted to avoid having a single dominant investor influence its decisions. With 13 million users, Hugging Face has become a major hub for open AI models, helping developers and companies, including China’s DeepSeek and Alibaba Group Holding Ltd – ADR (NYSE:BABA), distribute their AI technologies globally.

On Sunday, a report stated that Hugging Face was exploring a potential sale that could value the company at $13 billion or more. The firm faced a security breach a month earlier after an OpenAI model went rogue and compromised its infrastructure.

Notably, this report comes as Nvidia’s Q2 financial results highlighted a 106% year-over-year increase in revenue, reaching $96.22 billion. The company’s CEO, Jensen Huang, stated that the ‘AI infrastructure buildout is at full steam,’ indicating Nvidia’s aggressive expansion in the AI sector. The chipmaker also said it has $18 billion in equity investments committed through fiscal year 2027.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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