Nvidia has agreed to acquire open-source AI platform Hugging Face for $12.9 billion, according to The Information, a deal that would extend the chipmaker's presence from hardware deep into the software and model-sharing ecosystem.
Nvidia has agreed to acquire open-source AI platform Hugging Face for $12.9 billion, a deal that would extend the chipmaker's reach well beyond hardware and into the software and model-sharing ecosystem at the heart of modern AI development.
The Information first reported the agreement, citing a person with knowledge of the deal. A source familiar with the matter told CNBC they could "confirm acquisition [by Nvidia] has been part of ongoing and recent talks," speaking anonymously to discuss details that are not public. Neither Nvidia nor Hugging Face immediately responded to requests for comment.
According to The Information, deal talks accelerated after Hugging Face received acquisition interest from another, unnamed suitor. Business Insider separately reported last week that Hugging Face had been working with a bank to evaluate bidders' interest in the startup.
Hugging Face is among the most widely used platforms for discovering, sharing, and collaborating on open-source AI models. Developers and researchers rely on it to test and distribute tools, making it a central node in the open-source AI community. Bringing the platform under Nvidia's ownership would position the company as a direct participant in the model ecosystem, not merely the supplier of the chips that powers it.
Siddy Jobe, a fund manager at Eonopolis Exponential Technologies funds, said the strategic logic is clear. "I think Nvidia is very much a community, a platform-based company, and in that respect, I think Hugging Face fits perfectly within that," Jobe told CNBC's "Squawk Box Europe" on Thursday. "It is clear that Nvidia wants to be integrated in the entire stack vertically, going from energy to foundational models and also to applications," he added.
The acquisition news arrives a day after Nvidia reported second-quarter revenue that more than doubled year over year, with the company posting $96.22 billion in revenue and adjusted earnings of $2.22 per share — topping analyst consensus estimates of $92.17 billion and $2.10 per share, according to LSEG. Nvidia's stock surged 9% at midday Thursday. The company also projected third-quarter revenue of $108 billion, above analyst expectations. Nvidia's shares had already risen 4% in after-hours trading Wednesday following that earnings report.
The proposed deal would be among the largest in Nvidia's acquisition history. The company has been active over the past year, including a $20 billion licensing deal with AI chip startup Groq.
Hugging Face itself has drawn recent scrutiny following a hacking incident that raised broader questions about cybersecurity risks in the AI model supply chain. CEO Clément Delangue attributed the breach to engineering mistakes and told CNBC earlier this month that his company used an Nvidia version of a Chinese open model to address the attack. "AI cybersecurity is going to become a huge market in the U.S. and in the world," Delangue said. "In this market, probably open models will be kings."
Separately, Nvidia this week filed to establish the Nvidia Corporation Employees Federal Political Action Committee, a corporate PAC funded by eligible employees — a move signaling the company's expanding engagement with Washington as its policy footprint grows alongside its market influence.
If the Hugging Face acquisition closes, it would mark a significant consolidation in the open-source AI landscape, raising questions among developers and regulators about what concentrated ownership of a foundational community platform means for the broader ecosystem.
Marc Sabatini is a staff writer at TechEchelon covering enterprise software, cybersecurity, and the regulatory beats that shape both. He focuses on the deal flow and policy decisions that move markets.
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