Nvidia’s reported pursuit of Hugging Face is more than a big-ticket AI acquisition. It is a test of whether the industry’s leading home for open models can remain independent as the companies financing the AI boom tighten their grip.

The stakes have been building for years. In 2023, Hugging Face raised $235 million at a $4.5 billion valuation, with Nvidia among the investors. Late last year, it reportedly rebuffed a $500 million Nvidia investment that would have valued the company at $7 billion, wary of giving one backer too much sway over its decisions. Yet the company’s growth has made a fuller embrace harder to dismiss: it was recently generating about $150 million in annual revenue and was “close to profitability,” according to CEO Clem Delangue.¹

This year, Delangue has increasingly aligned Hugging Face with Nvidia’s campaign for open models, arguing that Washington should support them rather than restrict them as Chinese labs narrow the performance gap. That convergence sharpened the logic of a takeover: Nvidia would gain a powerful distribution hub for open-source models just as OpenAI, Anthropic, Google and Amazon pursue more of their own chip capacity.

Reports this week suggest the talks may be reaching a decisive point, though the picture remains unsettled. The Information said Nvidia had agreed to buy Hugging Face for $12.9 billion, while Business Insider reported that negotiations had not produced a signed deal and could still fall apart.¹ An earlier report, based on anonymous sourcing, had described a near-$13 billion purchase as being discussed but not completed.²

For Nvidia, the prize is strategic as well as financial. Hugging Face helps developers find, share and run models, potentially giving Nvidia another route into cloud computing and a customer base for unused capacity. For the open-AI community, the same deal carries the inverse risk: the platform built around broad model access could become more deeply tied to the hardware supplier whose dominance it once helped spread.