Nvidia snaps up Hugging Face for $12.9 billion as closed AI labs pull away

Nvidia is acquiring open-source AI platform Hugging Face for $12.9 billion, according to The Information. Hugging Face hosts open AI models and offers cloud services. The company has led its space for ten years, generating about $150 million in annual revenue and sitting "close to profitability," according to CEO Clem Delangue. Nvidia is paying roughly 80 times annual revenue.

Nvidia previously committed $26 billion over five years to develop open-source AI models. Closed providers like OpenAI and Anthropic are actively reducing their dependence on Nvidia hardware. OpenAI is building custom chips with Broadcom, signed a billion-dollar deal with chip startup Cerebras, and secured access to AMD chips. Anthropic is developing its own AI chip too, and Google has been doing the same for a while.

Nvidia could scale up Hugging Face's cloud business and position it as a kind of OpenRouter for open-weight models. That would fit the company's existing strategy. Hugging Face is well-known and popular among developers, and the deal would give the company a good reason to buy more Nvidia chips.

AI News Without the Hype – Curated by Humans

Subscribe to THE DECODER for ad-free reading, a weekly AI newsletter, our exclusive "AI Radar" frontier report six times a year, full archive access, and access to our comment section.