Nvidia agrees to buy Hugging Face for $12.9 billion in major AI deal, taking control of the ‘GitHub of AI’

Nvidia has agreed to buy Hugging Face for $12.9 billion, a deal that would put the world’s dominant AI chipmaker in control of one of the most important distribution hubs for open AI models.

The Information first reported the agreement Wednesday, citing a person familiar with the deal. Reuters later reported the news and said Nvidia and Hugging Face did not immediately respond to requests for comment.

“Nvidia has agreed to buy Hugging Face, a company known for its GitHub-like repository of open-source AI models, for $12.9 billion,” The Information reported.

The deal comes just two days after Business Insider reported that Hugging Face was exploring a potential sale at a valuation of $13 billion or more. The New York-based AI company reportedly worked with a bank to gauge interest from potential buyers, with talks still described as preliminary at the time.

The acquisition would give Nvidia something it cannot manufacture in a semiconductor fab: a massive community of AI developers and a repository that has become a default destination for models, datasets and machine learning tools.

Hugging Face is often called the “GitHub of AI.” That description now carries much bigger implications.

Nvidia already dominates the hardware used to train and run many of the models hosted on Hugging Face. Buying the platform would give the chip giant a major position higher up the AI stack, where developers discover models, share them, optimize them for different hardware, and deploy them into applications.

The deal comes just two days after reports that Hugging Face was exploring a potential sale at a valuation of $13 billion or more. Nvidia appears to have moved quickly.

The $12.9 billion price represents a remarkable jump from Hugging Face’s last major funding round. The New York-based startup raised $235 million at a $4.5 billion valuation in August 2023 from investors including Nvidia, Google, Amazon, Salesforce, IBM, Intel, AMD, Qualcomm and Sound Ventures. Nvidia was already an investor long before becoming its buyer.

At $12.9 billion, Hugging Face is selling for nearly three times its 2023 valuation.

TechStartups covered that $235 million Series D exactly three years ago, on August 24, 2023. At the time, Hugging Face was emerging as one of the most valuable independent machine learning platforms. Three years later, it has become strategic enough for Nvidia to spend nearly $13 billion to own it.

Nvidia is buying more than an AI repository

Founded in 2016 by Clément Delangue, Julien Chaumond and Thomas Wolf, Hugging Face built its position without producing the industry’s dominant proprietary AI model. Instead, it became the place where much of the broader AI community publishes, finds and works with models.

That position could prove especially valuable to Nvidia.

Open models give developers an alternative to closed systems from companies such as OpenAI and Anthropic. Those same AI companies have incentives to reduce their dependence on Nvidia hardware over time, including through custom AI chips.

Nvidia has reason to keep the open model ecosystem thriving.

The Information reported that Nvidia’s leaders see successful open models as a counterweight to closed AI developers that are working to reduce their reliance on Nvidia. The chipmaker has been investing in its own Nemotron open models and recently struck a $6 billion deal to license AI development technology from Poolside and recruit more than 100 of its employees.

Hugging Face puts Nvidia at the center of that strategy.

The acquisition could raise a harder question for the developer community: What happens to Hugging Face’s neutrality?

Part of the platform’s appeal has been its ability to host competing models and support different hardware providers under one roof. Google, Amazon, Microsoft and other Nvidia rivals have their own AI chips and infrastructure ambitions. Hugging Face has served developers across those competing ecosystems.

Under Nvidia ownership, that relationship changes.

The deal marks another step in Nvidia’s transformation from the company selling the chips behind the AI boom into a company with interests across models, software, infrastructure and developer distribution.

Nvidia built its AI empire by supplying the machines.

Now it is buying one of the places where the AI itself lives.

Hugging Face Team