Nvidia has reportedly agreed to acquire Hugging Face for $12.9 billion, according to The Information, citing a source familiar with the matter.

Business Insider, which first reported Hugging Face was fielding takeover interest, noted that talks had not yet produced a signed agreement and could still fall apart.

Neither Nvidia nor Hugging Face has commented, and TechCrunch notes Nvidia‘s silence is noteworthy given its past quick responses to inaccurate reports.

The acquisition would give Nvidia a strong foothold in open-source AI, as Hugging Face is a leading hub for sharing and downloading open-source models.

This move is seen as protecting Nvidia‘s dominance in AI chips, which faces risk from major closed-source labs—OpenAI, Google, Amazon, Anthropic—building their own chips to reduce reliance on Nvidia.

A thriving open-source ecosystem keeps customers dependent on Nvidia‘s hardware, explaining why Nvidia has already invested tens of billions into open-source models.

The deal could also mark a comeback for Nvidia in cloud computing, after reportedly scaling back its DGX Cloud business.

Owning Hugging Face, which helps developers run AI models using rented compute, could give Nvidia a way back into that market.

Additionally, Nvidia has promised to cover costs for cloud computing deals; if customers don’t use all capacity, Hugging Face‘s customers could absorb it. The $12.

9 billion price is a massive jump from Hugging Face‘s last valuation of $4.

5 billion in a 2023 funding round led by Salesforce Ventures, with participation from Alphabet’s GV, IBM Ventures, and Nvidia itself.

Hugging Face had previously turned down a $500 million investment from Nvidia last year that would have valued it at $7 billion, citing a desire to avoid a dominant investor.

The company is reportedly generating about $150 million in annual revenue, up from $100 million two months earlier, and has approached profitability.

A near-$13 billion valuation would be a high multiple but hard to resist.

The acquisition would also give Hugging Face access to Nvidia‘s deeper pockets as AI infrastructure competitors like OpenRouter get acquired (Stripe recently bought OpenRouter for over $7 billion).