Nvidia in $13B talks to buy Hugging Face, testing open-source neutrality

Despite framing suggesting a done deal, Nvidia and Hugging Face have only held acquisition talks in recent weeks, with a potential valuation north of $13 billion. No agreement has been reached and the discussions could still collapse. It would rank among Nvidia’s largest deals and reflects an aggressive dealmaking push funded by its cash reserves — the company has $18 billion earmarked for equity investments this fiscal year on top of nearly $48 billion already parked in private firms. Microsoft reportedly met with Hugging Face as well, but those talks are no longer active.

The two sides are not strangers: Nvidia backed Hugging Face’s $235 million round in 2023 at a $4.5 billion valuation. Notably, Hugging Face rejected a $500 million Nvidia investment late last year that would have valued it at $7 billion, citing a desire to avoid a dominant shareholder capable of steering its decisions. A full acquisition at nearly double that price signals both how quickly valuations for AI infrastructure have climbed and how much Nvidia wants ownership rather than a minority stake.

The strategic logic is clear — Hugging Face hosts millions of open-source models and datasets and sits at the center of developer workflows, giving Nvidia deeper reach into the community that ultimately buys its GPUs and a channel to push more workloads onto its hardware. But ownership cuts against Hugging Face’s core value proposition: neutrality. The platform deliberately supports rival silicon from AMD and Intel, and control by the market’s dominant chipmaker would raise obvious questions about whether that even-handedness survives.