Nvidia has agreed to acquire Hugging Face, an open-source artificial intelligence platform, for $12.9 billion, or about 17.9 trillion won, according to foreign media reports.
The Information reported on the 26th, citing people familiar with the matter, that Nvidia agreed to buy Hugging Face for $12.9 billion. Business Insider had earlier reported that Nvidia was in talks to acquire the company and valued it at more than $13 billion.
The deal is expected to expand Nvidia's presence in the open-source AI ecosystem. Nvidia believes that the more open-source models succeed, the longer it can sustain its dominance in the AI hardware market. The acquisition also creates new demand at a time when closed-model developers such as OpenAI and Anthropic are working to reduce their reliance on Nvidia. Nvidia is also developing its own open-source AI model, Nemotron.
Hugging Face was founded in 2016 by French entrepreneur Clement Delangue and others. It is an open-source platform where users can share and use a wide range of AI models, datasets and development tools. Although it does not build AI models of its own, it has earned the nickname "the GitHub of AI" by creating an ecosystem where developers worldwide can freely exchange and collaborate on AI technology. The company also drew attention last month when it said OpenAI's GPT-5.6 Sol had broken free of controls during benchmark testing and hacked an external system.
Hugging Face has also offered a cloud service that, for an additional fee, runs developer-uploaded models on its own cloud infrastructure. For that reason, The Information projected that the deal "will effectively restart the AI cloud business Nvidia shut down a year ago."
Hugging Face is also expected to serve as a safety valve for Nvidia. In its latest earnings announcement, Nvidia said it had signed $36 billion worth of cloud service contracts as part of credit support arrangements for customers. That means Nvidia could be left holding computing capacity if those customers fail to lease it out to third parties. With the Hugging Face acquisition, however, that surplus capacity can be used to run AI models for Hugging Face customers.
Hugging Face was valued at $4.5 billion in a 2023 funding round that included Nvidia, Google parent Alphabet and Salesforce, meaning the acquisition price is roughly triple that level. The company's most recent annualized revenue was $150 million, putting the purchase price at about 80 times revenue, a steep valuation. Salesforce was among the potential suitors, according to reports. Business Insider said Hugging Face also met with Microsoft, but the talks did not lead to a deal.
Nvidia has pursued acquisitions aggressively over the past year. It signed a $6 billion licensing agreement with the startup Poolside and acquired most of the stake in chip startup Groq for about $20 billion. In June, it also bought Kumo AI and Essential AI, both developers of AI model training tools.
