Nvidia has agreed to acquire Hugging Face for $12.9 billion, according to a report from The Information on Wednesday, citing a source familiar with the matter. The news follows earlier reports from Business Insider over the weekend that Hugging Face was exploring takeover interest. However, Business Insider noted on Wednesday that talks—which could value the company at over $13 billion—have not yet produced a signed agreement and could still fall apart.
TechCrunch reached out to both Nvidia and Hugging Face for comment, but neither has responded as of publication. Nvidia's silence is particularly notable, given the company's history of quickly addressing reports it considers inaccurate.
A Strategic Move into Open-Source AI
Founded in 2016, Hugging Face has become one of the most prominent platforms where developers share and download open-source AI models. Acquiring it would give Nvidia a significant foothold in the open-source AI ecosystem, precisely at a time when open-source developers are striving to close the gap with closed AI systems from companies like Anthropic and OpenAI.
Why does Nvidia want this? The primary motivation likely lies in protecting its dominance in AI chips—a position that appears increasingly vulnerable despite Nvidia's aggressive release schedule. Major closed-source AI labs, including OpenAI, Google, Amazon, and Anthropic, are all developing their own custom AI chips to reduce reliance on Nvidia. A thriving open-source ecosystem offers customers alternatives to these closed labs, thereby keeping more of the market dependent on Nvidia's hardware. This also explains why Nvidia has already invested tens of billions of dollars into building its own open-source AI models.
The Open-Source Debate and Political Context
The potential acquisition should come as no surprise, given Hugging Face CEO Clem Delangue's public alignment with Nvidia's open-source push throughout 2026. This alignment has unfolded amid a growing policy debate, as Washington officials reportedly considered restrictions on open-weight models. Chinese labs like Moonshot AI have released models—such as Kimi K3—that rival leading U.S. systems on benchmarks while being significantly cheaper to run, sparking competitive and national-security concerns in the U.S. capital. Some critics of closed labs, including White House advisor David Sacks, have suggested that these fears are being amplified by the "duopoly" of Anthropic and OpenAI.
In a CBS "Face the Nation" appearance in early 2026, Delangue mentioned that Hugging Face used an Nvidia-modified version of a Chinese open-source model to defend against a cyberattack. He also pointed to a letter signed by Nvidia CEO Jensen Huang and 24 other companies—including Hugging Face—urging the U.S. government to support open models rather than restrict them. In a separate CNBC interview later in July, Delangue reiterated these points, warning that China is "clearly dominating" open-source AI.
A Comeback in Cloud Computing
The deal would also mark a strategic comeback for Nvidia in cloud computing. Roughly a year ago, Nvidia scaled back its DGX Cloud business. However, according to The Information, owning Hugging Face—which already helps developers deploy AI models using rented computing power—could provide Nvidia with a pathway back into the cloud market without building from scratch.
Financial Safety Net and Future Outlook
There is also a financial safety net at play. Nvidia has promised to help cover operational costs and provide resources to ensure Hugging Face's continued growth post-acquisition, mitigating potential risks associated with the transition.
As the AI industry continues to evolve, this potential acquisition underscores the strategic importance of open-source ecosystems in shaping the future of AI development and deployment. If finalized, it would mark a pivotal moment in the ongoing battle between open and closed AI systems, with far-reaching implications for developers, enterprises, and policymakers alike.
via TechCrunch AI