Nvidia Reportedly Nears $12.9 Billion Acquisition of Hugging FaceDeep Dive

What Happened

Nvidia has reportedly agreed to acquire Hugging Face, a prominent open-source AI platform, for $12.9 billion. The Information first reported this development on Wednesday, August 26, 2026, citing an individual with direct knowledge of the negotiations. This reported agreement follows earlier interest from another suitor, which prompted Hugging Face to engage a bank to evaluate potential bidders. Business Insider had previously indicated that Nvidia was in discussions to acquire Hugging Face, with reports last week detailing Hugging Face's collaboration with a financial institution to assess acquisition interest. As of Thursday, August 27, 2026, neither Nvidia nor Hugging Face has publicly confirmed the deal, and CNBC stated it could not independently verify the report. Nvidia's shares rose 4% in after-hours trading following its strong earnings report on Wednesday, coinciding with the acquisition news.

The reported acquisition price represents a substantial increase from Hugging Face's last known valuation of $4.5 billion in a 2023 funding round, which included investments from Salesforce Ventures, Alphabet's GV, IBM Ventures, and Nvidia itself. Late last year, Hugging Face reportedly declined a $500 million investment offer from Nvidia that would have valued the company at $7 billion, citing a desire to avoid a dominant investor. The current reported valuation of $12.9 billion, potentially exceeding $13 billion according to Business Insider, highlights the rapid appreciation of AI-focused companies and the strategic importance of open-source platforms in the evolving AI landscape.

What the Evidence Establishes

Evidence from multiple reports establishes that Nvidia is in advanced stages, or has reportedly agreed, to acquire Hugging Face for approximately $12.9 billion. The Information, a reputable tech news outlet, is cited by both CNBC and TechCrunch as the primary source for the $12.9 billion figure and the agreement. Business Insider independently reported that Nvidia was

What the Evidence Establishes

Evidence from multiple reports establishes that Nvidia is in advanced stages, or has reportedly agreed, to acquire Hugging Face for approximately $12.9 billion. The Information, a reputable tech news outlet, is cited by both CNBC and TechCrunch as the primary source for the $12.9 billion figure and the agreement. Business Insider independently reported that Nvidia was "in talks" to acquire Hugging Face and that Hugging Face had been working with a bank to evaluate bidders' interest. This corroboration across two distinct financial news outlets, both citing sources familiar with the matter, lends significant weight to the claim of an impending or agreed-upon deal, despite the lack of official confirmation from either company.

The strategic rationale for Nvidia's interest is also well-established. Siddy Jobe, a fund manager at Eonopolis Exponential Technologies funds, stated on CNBC's "Squawk Box Europe" that the acquisition "made sense" given Nvidia's strategy to integrate vertically across the entire AI stack, from energy to foundational models and applications. Jobe noted Nvidia's non-discriminatory approach to closed and open-source models, suggesting Hugging Face's community and platform-based nature aligns perfectly with Nvidia's "five-layer cake" strategy. Furthermore, TechCrunch highlighted that acquiring Hugging Face would provide Nvidia a "strong foothold in the world of open-source AI," which is crucial for protecting its dominance in AI chips as major closed-source AI labs like OpenAI and Google develop their own hardware.

Where the Accounts Conflict

While both CNBC and TechCrunch report on the potential acquisition, a primary point of conflict or ambiguity lies in the definitive status of the deal. The Information, as cited by both outlets, states that Nvidia "has agreed to buy" Hugging Face. However, TechCrunch also references Business Insider's report from Wednesday night, which indicated that the talks, valuing the company at "more than $13 billion," had "not yet produced a signed agreement and could still atomize." This suggests a potential discrepancy in whether a final agreement has been reached or if negotiations are still ongoing and subject to collapse.

Another minor divergence appears in the reported valuation. The Information's figure, widely cited, is $12.9 billion. Business Insider, however, mentioned talks that would value the company at "more than $13 billion." While these figures are close, the slight difference could reflect varying stages of negotiation or different interpretations of the deal's final structure. Crucially, CNBC explicitly stated it "could not independently verify the report," and both Nvidia and Hugging Face had not responded to requests for comment as of Thursday morning, August 27, 2026. Nvidia's typical swift response to inaccurate reports, as noted by TechCrunch, makes its current silence "particularly noteworthy," adding to the uncertainty regarding the deal's finality.

Context and Stakes

This reported acquisition occurs amidst a rapidly accelerating AI arms race, where control over both hardware and software ecosystems is paramount. Nvidia, a dominant player in AI chips, has been actively expanding its reach into the software and model layers, as evidenced by its $20 billion licensing deal with AI chip startup Groq. The move for Hugging Face, a central hub for open-source AI development, is a strategic imperative for Nvidia to maintain its market position. Major closed-source AI labs, including OpenAI, Google, Amazon, and Anthropic, are developing their own AI chips to reduce reliance on Nvidia, creating a competitive threat. By integrating Hugging Face, Nvidia can foster a thriving open-source ecosystem that remains dependent on its hardware, offering alternatives to proprietary systems.

The deal also marks a potential reentry for Nvidia into cloud computing. Nvidia reportedly scaled back its DGX Cloud business approximately a year ago. Hugging Face, which already facilitates developers in running AI models using rented computing power, could provide Nvidia a pathway back into this market without building from scratch. Furthermore, Nvidia has committed to covering tens of billions of dollars in cloud computing deals for its customers. Owning Hugging Face could offer a "financial safety net" by allowing Nvidia to sell any unused computing capacity to Hugging Face's extensive customer base. The valuation jump from $4.5 billion in 2023 to nearly $13 billion underscores the intense competition and perceived value in the AI infrastructure space, especially following Stripe's reported $7 billion acquisition of OpenRouter, a startup valued at $1.3 billion just months prior.

What to Watch Next

The immediate next step to watch is an official statement from either Nvidia or Hugging Face regarding the reported acquisition. Their silence, particularly Nvidia's, is notable given past practices of addressing inaccurate reports. A formal announcement would clarify the deal's status, final valuation, and projected timeline. Should the acquisition be confirmed, attention will shift to regulatory bodies, specifically in the United States and Europe, which may initiate antitrust reviews given Nvidia's already significant market power in the AI sector. The European Commission and the U.S. Federal Trade Commission have historically scrutinized large tech mergers, and a deal of this magnitude would likely attract their attention.

Beyond the immediate confirmation, observers should monitor how the integration of Hugging Face's open-source platform with Nvidia's hardware and software stack progresses. This includes potential changes to Hugging Face's operational independence, its open-source philosophy, and the development of new tools or services that leverage Nvidia's GPU infrastructure. Any shifts in Hugging Face's leadership or its community engagement model will also be critical indicators. Furthermore, the market will be watching for reactions from competitors like Anthropic and OpenAI, as well as other chipmakers, to see if this move by Nvidia prompts further consolidation or strategic partnerships within the AI ecosystem.

Bottom Line

Nvidia's reported $12.9 billion acquisition of Hugging Face, if confirmed, represents a significant strategic maneuver to solidify its position across the entire artificial intelligence value chain. By integrating a leading open-source AI platform, Nvidia aims to protect its dominant AI chip market share against rising competition from major tech firms developing proprietary hardware. The deal would also provide Nvidia a renewed entry point into the cloud computing market and a mechanism to manage its existing cloud capacity commitments. While official confirmation is pending, the reported valuation reflects the intense competition and rapid appreciation within the AI infrastructure sector.

The move underscores Nvidia's commitment to both closed and open-source AI models, aligning with CEO Clément Delangue's advocacy for open models, even after a recent cybersecurity incident involving Hugging Face. The acquisition would grant Hugging Face access to Nvidia's substantial financial resources, enabling it to compete more effectively against other AI infrastructure providers. The broader implications include potential shifts in the open-source AI landscape, increased regulatory scrutiny, and a likely acceleration of integration between AI hardware and software development, further entrenching Nvidia's influence in the foundational layers of artificial intelligence.