Startups & Funding
Nvidia nears $12.9B deal to buy Hugging Face
Nvidia has agreed to buy Hugging Face for $12.9 billion, The Information reported, though Business Insider says the deal isn't yet signed and could still fall apart.
The Information cited a source familiar with the matter for the $12.9 billion price. Business Insider, which first reported over the weekend that Hugging Face was fielding takeover interest, said Wednesday night that talks — which would value the company at more than $13 billion — hadn’t yet produced a signed agreement. Neither Nvidia nor Hugging Face responded to TechCrunch’s requests for comment, notable because Nvidia has moved quickly in the past to correct reports it considers inaccurate.
Hugging Face, founded in 2016, is one of the most popular hubs for developers to share and download open-source AI models. Owning it would give Nvidia a stronger foothold in open-source AI at a moment when the biggest closed labs — OpenAI, Google, Amazon, and Anthropic — are all building their own AI chips to reduce their reliance on Nvidia. A thriving open-source ecosystem gives customers alternatives to those labs, which in turn keeps more of the market dependent on Nvidia’s hardware; the company has already spent tens of billions of dollars building its own open-source AI models. Hugging Face CEO Clem Delangue has spent much of the year publicly aligned with Nvidia’s open-source push amid a broader Washington debate over restricting open-weight models.
The deal would also mark a comeback for Nvidia in cloud computing, after it reportedly scaled back its own DGX Cloud business about a year ago; owning Hugging Face, which already helps developers rent compute to run models, could give Nvidia a way back into that market.
The price marks a steep jump from Hugging Face’s last known valuation of $4.5 billion, set in a 2023 round that raised $235 million. Hugging Face had turned down a $500 million investment offer from Nvidia late last year that would have valued it at $7 billion, reportedly because it didn’t want a dominant investor swaying its decisions. The company is still comparatively small by revenue — recently generating about $150 million a year, up from roughly $100 million just two months earlier — making a near-$13 billion price a steep multiple.
Why it matters
The deal would follow a broader pattern of AI infrastructure players getting absorbed by larger companies, like Stripe’s recent purchase of OpenRouter for more than $7 billion, months after that startup was valued at just $1.3 billion.