Nvidia is nearing a $14 billion acquisition deal for Hugging Face.
Nvidia Corp. (NASDAQ: NVDA) is nearing what could become a roughly $14 billion acquisition of AI platform Hugging Face, extending CEO Jensen Huang’s strategic push beyond hardware and deeper into the software ecosystem built atop its chips. According to a Wednesday report by Bloomberg, Nvidia is in advanced talks to acquire Hugging Face for $12.9 billion, with an additional roughly $1 billion potentially allocated toward employee retention. While an agreement could materialize as soon as this week, no final deal has been reached.
The potential transaction aligns with broader ecosystem-building efforts. Franklin Templeton portfolio manager Sara Araghi told Bloomberg that Nvidia is actively "backstopping" AI companies requiring financing, a strategy Bloomberg characterized as "ecosystem building rather than circular finance." Hugging Face would significantly amplify this approach. As reported by The Information, the platform’s compute-rental business could provide Nvidia with an alternative entry point into cloud services, while also helping deploy computing capacity that Nvidia has already agreed to financially backstop for its customers.
Strategically, Nvidia’s interest in open-source AI remains central. Bloomberg reported that Huang has been encouraging open models partly to prevent the sector from being dominated by a handful of large corporations that simultaneously serve as major Nvidia customers and develop their own proprietary chips.
Market sentiment reflects strong confidence in Nvidia’s trajectory. Prediction markets on Polymarket currently assign the chipmaker a 76% probability of ending 2026 as the world’s largest company, backed by more than $6.5 million in trading volume. Meanwhile, Chinese developers have emerged as significant forces in open-weight AI. Traders on Kalshi have priced a Chinese model reaching the No. 1 ranking this year at 9.2%, a scenario that would represent a major disruption for American frontier AI firms.
Nvidia’s relationship with Hugging Face predates these acquisition talks. The company was already a minority investor following its participation in Hugging Face’s $235 million Series D funding round in 2023. However, the startup previously declined a reported $500 million investment from Nvidia at a $7 billion valuation, citing concerns over granting a single investor excessive influence. In 2024, CEO Clément Delangue cautioned that "concentration of power is the biggest risk in AI." Although that statement preceded the current takeover discussions, an acquisition would grant Nvidia control over one of the most critical platforms where developers share and deploy open models.
Financially, Hugging Face reportedly generates approximately $150 million in annualized revenue. At the proposed $12.9 billion purchase price, Nvidia would be paying roughly 86 times sales, indicating that the valuation primarily reflects the platform’s developer community and its central role in the open-model ecosystem rather than its current earnings. Preserving that neutral, community-driven positioning could prove challenging under Nvidia’s ownership. Analyst Brad Gastwirth noted that "the biggest risk is neutrality," warning that Nvidia must carefully avoid undermining Hugging Face’s longstanding reputation as an open, vendor-neutral platform.