Nvidia Nears $12.9 Billion Hugging Face Acquisition Amid Conflicting Reports
Nvidia's reported $12.9 billion Hugging Face deal would add an open-source AI hub, cloud capacity outlet and defense against custom-chip rivals as rivals rise.
Summary
As of August 27, 2026, Nvidia reportedly had agreed to acquire Hugging Face for $12.9 billion, but separate information valued it above $13 billion, said nothing was signed and warned talks could collapse. Neither company commented. Founded in 2016, Hugging Face is a leading hub for sharing and downloading open-source AI models.
The purchase would help defend Nvidia’s AI chip dominance as OpenAI, Google, Amazon and Anthropic develop proprietary chips, extending Nvidia’s tens of billions of dollars invested in open models. CEO Clem Delangue aligned with this push in 2026, warning in late July that China dominates open-source AI and saying in August that Hugging Face used an Nvidia-modified Chinese model after a cyberattack. Delangue cited a letter signed by Nvidia CEO Jensen Huang and 24 companies, including Hugging Face, urging Washington not to restrict open-weight models. Moonshot AI’s cheaper Kimi K3 matched leading U.S. systems on benchmarks, while White House adviser David Sacks blamed concerns partly on an Anthropic and OpenAI duopoly.
Owning Hugging Face could revive Nvidia’s cloud push after DGX Cloud was scaled back around 2025, using Hugging Face’s rented computing service to resell capacity left unused under customer contracts Nvidia has guaranteed for tens of billions of dollars. Hugging Face raised $235 million at a $4.5 billion valuation in 2023 from a Salesforce Ventures-led group including Alphabet’s GV, IBM Ventures and Nvidia, then rejected Nvidia’s $500 million offer at a $7 billion valuation in late 2025 to avoid dominant investor influence. Annual revenue recently rose from about $100 million to $150 million in two months, bringing it close to profitability but making the proposed price a steep multiple. Stripe paid more than $7 billion for OpenRouter in August 2026 after the early 2023 startup was valued at $1.3 billion in May.
Positives
- $150 million in annual revenue, up from roughly $100 million two months earlier, has brought Hugging Face close to profitability.
- Tens of billions of dollars invested in Nvidia’s open models could gain distribution through Hugging Face’s developer ecosystem.
- Unused capacity from Nvidia-guaranteed cloud contracts could be resold through Hugging Face’s rented computing service.
- $12.9 billion would give Hugging Face substantially deeper resources as AI infrastructure consolidation accelerates.
- Jensen Huang and 24 companies, including Hugging Face, urged Washington to support rather than restrict open-weight models.
Risks & concerns
- No signed agreement was confirmed as of August 27, 2026, and the takeover talks could still collapse.
- Nearly $13 billion represents a steep multiple on Hugging Face’s roughly $150 million in annual revenue.
- OpenAI, Google, Amazon and Anthropic are developing proprietary chips that could reduce their reliance on Nvidia.
- Tens of billions of dollars in guaranteed cloud contracts could leave Nvidia holding computing capacity customers do not use.
- Hugging Face previously rejected Nvidia’s $500 million investment offer because a dominant investor could influence its decisions.
- Full ownership by Nvidia would end Hugging Face’s independence and concentrate a major open-source AI hub under the leading AI chip supplier.