SANTA CLARA: Nvidia has agreed to acquire open-source artificial intelligence platform Hugging Face for $12.9 billion, according to a report Wednesday from The Information, citing a person with direct knowledge of the deal.
The acquisition talks began after Hugging Face, a widely used platform where developers collaborate, test and share AI tools, received interest from another potential buyer, The Information reported. Business Insider separately reported that Nvidia had been “in talks” to acquire the startup, and that Hugging Face had recently worked with a bank to evaluate bidder interest.
If completed, the deal would place one of the most popular repositories for open-source AI models under Nvidia’s control, deepening the chipmaker’s influence in the software and model ecosystem. Nvidia, whose shares rose 4% in after-hours trading Wednesday following its blockbuster earnings report, has made a series of strategic moves over the past year, including a $20 billion licensing deal with AI chip startup Groq.
Siddy Jobe, a fund manager at Eonopolis Exponential Technologies funds, said the acquisition aligns with Nvidia’s broader strategy. “I think Nvidia is very much a community, a platform-based company, and in that respect, I think Hugging Face fits perfectly within that,” Jobe told CNBC’s “Squawk Box Europe” on Thursday. He added that Nvidia aims to integrate vertically across the entire AI stack, “going from energy to foundational models and also to applications.”
Hugging Face was recently at the center of a hacking incident that raised concerns about AI security. CEO Clément Delangue, a proponent of open-source models, attributed the attack to engineering errors and said the company used an Nvidia version of a Chinese open model to resolve it. Delangue told CNBC earlier this month that “AI cybersecurity is going to become a huge market” and that “open models will be kings” in that space.
The acquisition news comes as Nvidia reported fiscal second-quarter results that beat Wall Street expectations. The company posted adjusted earnings of $2.22 per share, topping analyst estimates of $2.10, and revenue of $96.22 billion, exceeding the projected $92.17 billion, according to LSEG.
Nvidia CFO Colette Kress said on a call with analysts that the company expects fiscal 2028 revenue growth of 70%, well above analysts’ forecasts of 44%. She noted that customer forecasts “point to our growth doubling next year” but said guidance reflects ongoing supply constraints.
Net income for the quarter more than doubled to $53.95 billion, or $2.22 per share, from $24.76 billion, or $1.87 per share, a year earlier.
Almost four years after the launch of OpenAI’s ChatGPT, Nvidia continues to see massive growth, with quarterly revenue more than doubling from $46.7 billion in the same period last year. The company’s chips remain central to building and serving advanced AI models, and Nvidia has increasingly provided financial backing to help fund new AI data centers.
Still, after a historic three-year rally, investor enthusiasm has moderated this year. Nvidia shares have risen about 13% as of Wednesday’s close, slightly outperforming the Nasdaq. The company faces emerging competition from Advanced Micro Devices, Google and others, while soaring memory costs, driven by a global shortage, present ongoing challenges.
