Nvidia’s reported $12.9 billion Hugging Face deal puts open-source AI neutrality in focus

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Nvidia has reached an agreement to acquire Hugging Face, the company behind one of the largest repositories of publicly available AI models. Based on reports from The Information, the company will pay roughly around $12.9 billion to buy Hugging Face. However, Reuters has been unable to verify the information, while Nvidia and Hugging Face had not publicly commented.

But for the global AI community, the question of who owns Hugging Face is not just a matter of cost. Hugging Face is widely embraced as the open-source technology behind the AI philosophy. With the largest chipmaker in the world owning this technology, one must ask who controls one of the fundamental infrastructures in the AI system.

Hugging Face is not exactly a niche player. According to its Spring 2026 open-source report, the platform has amassed 13 million users and hosts over 2 million public models in 2025. These are the models that developers use irrespective of the chips and software they might want to use. If Nvidia acquires it, it would take over a public resource owned by a company whose GPUs those same developers either want to buy or choose to avoid depending on the pricing, availability and strategy.

Why Nvidia ownership threatens the platform’s neutrality

Hugging Face’s value has been established through its commitment to an open ecosystem. The company’s platform is able to function with various types of hardware from key manufacturers like Nvidia, as well as competitors like Intel and AMD, which makes its neutrality one of its strong points.

Owning it would provide Nvidia with contact to millions of developers and can, as Business Insider stated, “drive more workloads onto its chips.” Hugging Face’s own report listed Nvidia as the leading Big Tech player in the world of open-source AI over the past year, highlighting how closely aligned the firms already are.

“Buying the referee is a different move from sponsoring it.” — Cryptopolitan

This worry isn’t just in theory. As reported by the Financial Times, Hugging Face refused Nvidia’s offer of $500 million investment at a $7 billion valuation last year because it was not eager for a single investor to have too much power. If the technology giant did acquire Hugging Face, the debate would be over.

From a rejected $7 billion check to a $12.9 billion deal

The reported sum denotes something of a steep increase from Hugging Face’s previous milestones in valuation.

Table: Author calculations based on reported Hugging Face valuation milestones.

Hugging Face last raised $235 million in 2023 at a $4.5 billion post-money valuation, with investors including Salesforce Ventures, Nvidia, Google, Amazon, AMD, Intel and IBM.

At $12.9 billion, the mentioned acquisition amount is almost 2.9 times greater than the valuation in 2023 and about 84% more than the $7 billion valuation of Nvidia’s rejected investment proposal.

According to TechCrunch, Hugging Face was in contact with banks to explore potential offers and had talks with Microsoft, while according to Business Insider, those negotiations were no longer taking place.

Nvidia’s cash pile and the market’s appetite for AI infrastructure

Nvidia has the financial firepower to fund the purchase. The company reported $96.2 billion in second-quarter revenue, up 106% year over year, including $89.0 billion from data centers. Business Insider also reported that Nvidia has $18 billion committed to equity investments for the rest of its fiscal year, on top of $47.9 billion already held in private companies.

The deal also fits a broader rush to own the infrastructure beneath AI applications. Stripe recently confirmed its acquisition of OpenRouter, with sources cited by the New York Times valuing that transaction at $7.5 billion.

Hugging Face sits in the same strategic layer. If Nvidia ultimately takes control, the debate will shift from whether the platform can remain independent to whether competitors and developers will continue to see it as neutral infrastructure.

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