Nvidia's $12.9B Hugging Face bid signals deepening control over open-source AI

Nvidia has agreed to acquire Hugging Face for $12.9 billion, according to reports Wednesday, though a final agreement has not yet been signed and negotiations could still collapse. Hugging Face, founded in 2016, operates the internet's most popular platform for sharing and downloading open-source AI models, making it a crucial staging ground for developers building alternatives to proprietary AI systems.

The acquisition fits Nvidia's broader defensive strategy. With major AI labs like OpenAI, Google, Amazon, and Anthropic all developing their own chips to reduce reliance on Nvidia hardware, controlling Hugging Face would anchor more developers and companies to Nvidia's ecosystem. CEO Clem Delangue has spent months publicly aligned with Nvidia's push for open-source models, even appearing on CBS and CNBC to advocate for them—signaling ideological common ground before the deal emerged.

The deal also gives Nvidia a path back into cloud computing. The company scaled back its DGX Cloud service a year ago, but acquiring Hugging Face's infrastructure for running rental-based AI models could revive that business without rebuilding from scratch.