Nvidia Pursues $14B Acquisition of Hugging Face to Bolster AI Ecosystem

Nvidia Corp. (NASDAQ:NVDA) is reportedly nearing a $14 billion deal to acquire AI platform Hugging Face, marking the company's push beyond chips and into the software ecosystem built on top of them.

The proposed acquisition would give Nvidia control over one of the key platforms where developers share and deploy open models. According to Bloomberg, Nvidia is in advanced talks to buy Hugging Face for $12.9 billion, with an additional $1 billion potentially going towards employee retention.

Hugging Face generates around $150 million in annualized revenue, which would make the purchase price roughly 86 times sales. This suggests that much of the value lies in Hugging Face's developer community and position at the center of the open-model ecosystem rather than its current revenue.

Nvidia CEO Jensen Huang has been encouraging open models to prevent AI from being dominated by a handful of large companies that are both major Nvidia customers and developing their own chips. The acquisition would also give Nvidia another route into cloud services through Hugging Face's compute-rental business.