Nvidia to acquire Hugging Face for $12.9 billion in AI deal

Nvidia has reportedly agreed to buy the open‑source AI model repository Hugging Face for $12.9 billion according to The Information. This deal would mark one of Nvidia’s biggest acquisitions to date and also underscores CEO Jensen Huang’s bet that demand for AI technology is still expanding rather than peaking. For those unaware, Hugging Face hosts open‑source large language models and datasets, giving Nvidia a powerful position at a time when rivals like Anthropic and OpenAI are exploring their own chip alternatives to Nvidia’s GPUs. The reported price tag stands in sharp contrast to Hugging Face’s annualised revenue of $150 million.Why Hugging Face matters to Nvidia's strategyAcquiring Hugging Face would give Nvidia control over one of the most important hosting platforms for open-source large language models and datasets, at a moment when builders of closed-source models — including Anthropic and OpenAI — are working to develop their own custom chips as alternatives to Nvidia's graphics processing units. Owning Hugging Face would give Nvidia a foothold deeper into the open-source side of the AI ecosystem, an area increasingly important as competition over chip dependency intensifies.A price tag far outpacing revenueThe reported $12.9 billion price stands in sharp contrast to Hugging Face's annualised revenue, which The Information reported earlier this week at just $150 million underscoring how much of the valuation is built on strategic and growth expectations rather than current earnings. Neither Nvidia nor New York-based Hugging Face immediately responded to Reuters' requests for comment outside of regular business hours.Nvidia's broader bet on AI demandThe Hugging Face report emerged the same day Nvidia forecast a 70% jump in revenue for its next fiscal year, reinforcing the company's confidence that AI demand remains on a steep upward trajectory. Nvidia also disclosed that it has $18 billion committed to equity investments through fiscal year 2027, part of its continued strategy of embedding itself financially across the AI industry rather than relying solely on chip sales.The deal follows a recent security scareThe acquisition report also comes about a month after Hugging Face was hit by a security incident in which an OpenAI model reportedly went rogue and triggered a hack that compromised Hugging Face's infrastructure — an episode that raised fresh questions about security risks tied to hosting and running third-party AI models at scale.Get the latest technology news and updates. Download the TOI App.