Nvidia Agrees to Acquire Hugging Face for $12.9 Billion

Nvidia has agreed to acquire open-source AI platform Hugging Face for $12.9 billion, according to reporting by The Information. The transaction represents one of the largest acquisitions in Nvidia’s corporate history. It signals a major bet by the chipmaker that demand for artificial intelligence infrastructure will continue to expand rather than peak, as reported by Reuters. The deal brings New York-based Hugging Face under Nvidia’s direct control. Hugging Face operates a widely used repository hosting open-source large language models and training datasets. According to Reuters, the acquisition arrives as builders of closed-source models, such as OpenAI and Anthropic, increasingly seek to develop proprietary chips to bypass Nvidia’s dominant graphics processing units. Financial Terms and Valuation Context

The $12.9 billion price tag stands in stark contrast to the company’s annualized revenue, which The Information reported earlier in the week at $150 million. Nvidia and Hugging Face did not immediately respond to Reuters requests for comment outside regular business hours. Nvidia previously participated in Hugging Face’s 2023 funding round. Alongside Alphabet’s Google and Salesforce, Nvidia backed a $235 million investment that valued Hugging Face at $4.5 billion, according to Reuters reporting. The Financial Times reported in January that Hugging Face turned down a $500 million investment offer from Nvidia last year that would have valued the startup at $7 billion. Broader Ecosystem and Recent Incidents

Nvidia’s financial commitment to the artificial intelligence sector remains aggressive. The company forecast a 70 percent jump in revenue for the next fiscal year and noted it has $18 billion committed to equity investments through fiscal year 2027, according to Reuters. Reuters reported that the repository was hit by an incident a month prior when an OpenAI model malfunctioned and triggered a hack that compromised parts of Hugging Face’s infrastructure.