Nvidia and Hugging Face have held discussions about a $13 billion deal in the last few weeks, according to a report Wednesday (Aug. 26) by Business Insider that cited a source familiar with the matter.
Another report Wednesday by The Information – citing sources with knowledge of the agreement – said the deal was finalized, with Nvidia paying $12.9 billion for Hugging Face.
That report notes that the acquisition will give Nvidia a key asset as open-source artificial intelligence (AI) model developers race to catch up to close-sourced versions from OpenAI and Anthropic.
According to that report, executives at Nvidia believe that a wealth of open models will help uphold the company’s dominance in the AI hardware space, as those models will counter closed-source AI developers, all of whom are trying to build competing AI server chips and reduce their dependence on Nvidia’s.
PYMNTS has contacted both Nvidia and Hugging Face for comment but has not yet gotten a reply.
The news follows an earlier Business Insider report that Hugging Face, whose platform lets developers find, share and develop AI models, was considering a sale that could value the company at $13 billion. Hugging Face was valued at $4.5 billion in 2023 when it raised $235 million in a Series D funding round.
The purchase of Hugging Face would mark the latest in a series of high-profile deals by Nvidia in the last year. The world’s largest company recently forged a $6 billion licensing agreement with startup Poolside and paid $20 billion in December to acquire tech and talent from inference chip startup Groq.
Nvidia on Wednesday reported record second quarter revenue of $96.2 billion, more than twice the prior year period, as demand for AI computing kept exceeding what Nvidia can supply, as PYMNTS wrote.
Speaking to analysts during an earnings call, Nvidia CEO Jensen Huang argued that AI has moved past the hype phase and “has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue.”
What matters now, added Huang, is that “AI is now doing productive and useful work” and “generating profitable tokens,” not whether it has surpassed some abstract intelligence threshold. He also dismissed the tech industry’s focus on artificial general intelligence, calling AGI benchmarks “kind of senseless at this point.”
