Nvidia Reportedly in Talks to Acquire Hugging Face for $12.9bn
Nvidia has been in discussions to acquire Hugging Face at a valuation exceeding $13 billion, according to Business Insider, just days after reports emerged that the open-model hub was exploring a sale in the region of that figure.
The Information takes it a step further, reporting an agreed deal valued at $12.9 billion, although Nvidia has declined to comment on the matter.
Business Insider suggests the talks are still ongoing and could potentially fall apart, while The Information claims a deal is already in place. Despite the lack of official confirmation from either party, the significance of Nvidia’s silence is noteworthy.
In the past, Nvidia has been quick to refute inaccurate reports. The absence of a response regarding this particular rumor raises questions.
What adds weight to the story is Hugging Face’s previous rejection of a $500 million investment from Nvidia, valuing the company at $7 billion. This was not a pricing dispute but rather a concern over governance, as Hugging Face wanted to maintain its position as neutral infrastructure, free from any single investor's control.
Since its 2023 funding round, which raised $4.5 billion led by Salesforce Ventures with Alphabet, GV, and IBM Ventures among the participants, Hugging Face’s valuation has nearly tripled.
According to The Information, Hugging Face generated approximately $150 million in annual revenue, a figure that would make the proposed acquisition roughly 86 times sales.
Hugging Face CEO Clem Delangue has expressed commitment to long-term sustainability over short-term profits or fundraising maximization. A sale to Nvidia would represent a marked shift in this strategy, raising questions and requiring careful consideration.
For Nvidia, the logic behind the potential acquisition is distribution rather than revenue. Owning the platform where most open-source AI models are hosted is significantly more valuable than the subscription business associated with it. It aligns with Nvidia’s recent trend of $40 billion in AI equity bets this year and follows acquisitions like Kumo in June.
The neutrality question persists, even if Hugging Face changes its mind about the buyer. While Nvidia publicly champions open models, signing an open-weights letter that OpenAI declined to join, acquiring a platform it currently only supports is distinct from owning it outright.
Delangue has argued that open models are where the competitive action lies, and Chinese labs have been gaining ground in this area. An American chipmaker controlling the primary distribution point for these models could trigger significant antitrust scrutiny in multiple jurisdictions.