Santa Clara/New York: Nvidia has reportedly agreed to acquire Hugging Face for $12.9 billion, potentially giving the world’s dominant AI-chip company control of one of the most influential platforms for open-source artificial intelligence models, datasets and developer tools.
The Information first reported the agreement, citing a person with knowledge of the deal. Reuters subsequently reported the development on Thursday, August 27, 2026. Nvidia and Hugging Face had not publicly confirmed the acquisition or disclosed transaction terms at the time of the latest reports.
If completed at the reported valuation, the transaction would rank among Nvidia’s biggest acquisitions and significantly extend its influence beyond GPUs and AI infrastructure into the software and model-distribution layer of the AI industry.
What Is Hugging Face?
Hugging Face has become one of the most important platforms in the global open-source AI ecosystem.
The New York-based company provides a central hub where developers, researchers and companies can publish, download, test and collaborate on:
- Large language models
- Image-generation models
- AI datasets
- Machine-learning libraries
- Model-development tools
- Inference and deployment services
The platform is widely used by the AI developer community and supports models from numerous companies and research organisations.
That makes Hugging Face strategically different from a traditional software acquisition: it operates as an important distribution and collaboration layer connecting AI researchers, model developers and infrastructure providers.
Nvidia Could Gain Much More Than a Software Company
Nvidia already dominates the market for high-performance GPUs used to train and run artificial-intelligence models.
Buying Hugging Face could give the company a much stronger position at another critical point in the AI ecosystem — where developers actually discover, download and deploy models.
Nvidia and Hugging Face have already worked together for years. In 2023, the companies announced a partnership integrating Nvidia’s DGX Cloud computing resources into the Hugging Face platform to make advanced AI training infrastructure more easily available to developers.
An acquisition would take that relationship dramatically further.
Instead of primarily supplying hardware underneath the AI industry, Nvidia could gain direct ownership of one of its most influential developer platforms.
Hugging Face Valuation Could Nearly Triple
The reported $12.9 billion purchase price represents a major increase from Hugging Face’s previous private-market valuation.
In 2023, Hugging Face raised $235 million from investors including Nvidia, Salesforce and Alphabet’s Google at a valuation of approximately $4.5 billion.
Reuters also reported that Hugging Face rejected a proposed $500 million Nvidia investment in 2025 that would have valued the company at around $7 billion.
A $12.9 billion acquisition would therefore value the company at almost three times its 2023 valuation.
The reported price is particularly notable because Reuters says Hugging Face generates annual revenue of only around $150 million, suggesting Nvidia would be paying primarily for the platform’s strategic importance, developer community and long-term potential rather than its current revenue.
Open-Source AI Is Becoming Strategically Important
The proposed deal comes as competition between open and closed AI models intensifies.
Companies such as OpenAI and Anthropic operate primarily through proprietary models and commercial APIs, while organisations including Meta and numerous independent developers have supported more open approaches.
Hugging Face has become a major meeting point for that open-model ecosystem.
For Nvidia, supporting open models can also reinforce demand for its hardware.
AI models still require significant computing power for training, fine-tuning and inference, and much of that workload currently runs on Nvidia GPUs.
Owning the platform where developers obtain and distribute those models could therefore deepen Nvidia’s relationship with AI customers throughout the development process.
Nvidia’s AI Business Continues Explosive Growth
The reported acquisition emerged just after Nvidia announced another record quarter.
On August 26, Nvidia reported $96.2 billion in fiscal second-quarter revenue, up 18% from the previous quarter and 106% from a year earlier.
Its Data Center division generated $89 billion, representing year-on-year growth of 117%.
Nvidia also forecast approximately $108 billion in revenue for its fiscal third quarter, plus or minus 2%.
CEO Jensen Huang said demand for AI computing was accelerating as more frontier labs, startups and open-model developers expanded their infrastructure.
That financial strength gives Nvidia substantial capacity to make large strategic investments across the AI industry.
Nvidia Increasing Investments Across AI Ecosystem
The Hugging Face report is part of a broader expansion strategy.
Rather than limiting itself to designing chips, Nvidia has increasingly invested in AI startups, infrastructure providers and companies building applications around its computing platform.
Reuters reported that Nvidia has committed billions of dollars to additional equity investments during fiscal 2027.
The strategy can help Nvidia strengthen the ecosystem around its GPUs even as some major technology companies work to develop their own AI accelerators.
Companies including cloud providers and leading AI laboratories are exploring alternative chips partly to reduce reliance on Nvidia.
Controlling a major developer platform such as Hugging Face could provide Nvidia with another strategic advantage even if competition in AI hardware increases.
Deal Could Raise Questions About Hugging Face’s Neutrality
An Nvidia takeover could also create concerns within the open-source community.
Hugging Face currently supports AI models and tools designed to run across different types of hardware, including processors from Nvidia competitors.
Its value to developers partly comes from functioning as a relatively neutral platform.
Ownership by Nvidia could therefore raise questions about whether the platform would continue treating competing hardware architectures and AI companies equally.
Business Insider reported that such neutrality concerns are among the important issues surrounding a potential acquisition.
How Nvidia would preserve Hugging Face’s open ecosystem could become one of the most closely watched aspects of any confirmed deal.
Neither Company Has Officially Confirmed Acquisition
Despite widespread reporting Thursday, the transaction should still be treated as a reported agreement rather than a formally announced acquisition.
Reuters said both Nvidia and Hugging Face did not immediately respond to requests for comment.
Nvidia’s official newsroom, which published the company’s August 26 financial results and other recent announcements, had not published a Hugging Face acquisition announcement at the time of verification.
Hugging Face’s official blog also did not show an acquisition announcement in the latest available posts.
Details such as the payment structure, expected closing date, regulatory approvals and future management arrangements therefore remain unclear.
Potentially Transformational AI Acquisition
If the $12.9 billion agreement is formally confirmed and ultimately completed, Nvidia would move another major step beyond its roots as a semiconductor manufacturer.
The company already supplies the computing infrastructure behind much of the generative-AI boom.
Hugging Face could give Nvidia greater influence over the models, datasets, software tools and developer community running on top of that infrastructure.
That combination could make the reported acquisition one of the most strategically important technology deals of the current AI boom.
For now, however, investors and developers will be watching for official confirmation from Nvidia or Hugging Face and details explaining how the highly influential open-source platform would operate under Nvidia ownership.
Source – Reuters / The Information / Nvidia
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