Nvidia close to acquiring Hugging Face for $12.9 billion

According to a report by The Information published last night, Nvidia (the company behind the Nvidia brand) has reached a deal to acquire Hugging Face for $12.9 billion, citing a source familiar with the terms. Business Insider, which first reported over the weekend that Hugging Face was evaluating acquisition offers, said yesterday that talks—valuing the company at more than $13 billion—had not yet produced a signed agreement and could still fall apart. TechCrunch reached out to both companies for comment; neither responded, and Nvidia’s silence is notable given its past practice of quickly denying reports it deemed inaccurate.

Why Nvidia needs this. The strategic logic is clear: protect dominance in AI chips. All major closed-source labs—OpenAI, Google, Amazon and Anthropic—are building their own chips to reduce reliance on Nvidia. A thriving open-source model ecosystem gives customers alternatives to those closed labs, leaving a larger share of the market dependent on Nvidia hardware. That is also why the company has already poured tens of billions of dollars into building its own open-source models. Hugging Face, founded in 2016, is the most popular hub for developers to share and download open models; its acquisition would give Nvidia an immediate foothold in that space.

Political context: China, Washington and the duopoly. The days of Hugging Face operating as an independent company have seemed limited for months. CEO Clem Delangue has spent the year aligning publicly with Nvidia’s push toward open source, against a backdrop of a Washington debate over possible restrictions on open-weight models. Chinese labs such as Moonshot AI have released systems—e.g., Kimi K3—that have matched leading American models on benchmarks while costing far less to run, heightening competitive and security concerns. Critics of the closed labs, including White House adviser David Sacks, have argued that the fears are amplified by the duopoly of Anthropic and OpenAI.

Return to cloud and financial safety net. The deal also marks a comeback for Nvidia in cloud computing. About a year ago the company scaled back its cloud business, DGX Cloud. According to The Information, owning Hugging Face, which already helps developers run models on rented compute, will give Nvidia a way back into the market without starting from scratch. There is also a financial safety net: Nvidia has committed to covering tens of billions of dollars in cloud-related costs for customers. If customers do not consume all the compute they have committed to, Nvidia could be left holding unused capacity; Hugging Face would enable the company to sell that spare capacity to platform users.

Valuation jump of three-fold in the round. The price reflects a sharp rise from the last known valuation. In 2023 Hugging Face raised $235 million in a round that valued it at $4.5 billion, led by…