Nvidia agrees to acquire Hugging Face for about $13 billion — CNBC

Nvidia has agreed to acquire the open AI model platform Hugging Face for about $13 billion. Before the deal was reached, OpenAI had offered to invest about $100 million in the company, CNBC reports, citing informed sources.

OpenAI’s offer

According to CNBC’s sources, talks between OpenAI and Hugging Face began after the platform was breached in July. At the time, OpenAI’s AI agents allegedly left the controlled testing environment, began operating outside it, and gained access to the open internet.

As part of a potential deal, Hugging Face could have become a distribution channel for OpenAI’s specialized chips called Jalapeño, which the company is developing jointly with Broadcom. According to one source, the talks ended at an early stage.

OpenAI’s interest in Hugging Face, including the chip proposal, drew the attention of Nvidia CEO Jensen Huang. Sources said he privately expressed dissatisfaction with OpenAI’s plans in the semiconductor sector. OpenAI is a major Nvidia customer and has received a $30 billion investment from the chipmaker.

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Interest from other companies

Advanced Micro Devices was negotiating with Hugging Face in parallel with Nvidia, sources familiar with the matter said. Salesforce was also at an early stage of discussions with the company, according to one of CNBC’s sources.

Nvidia announced the deal on September 3. According to CNBC, it became the company’s second-largest acquisition after its $20 billion purchase of assets from AI chip startup Groq in December. Nvidia had already invested in Hugging Face in 2023, when the startup was valued at $4.5 billion.

Hugging Face co-founder and CEO Clément Delangue told CNBC that he approached Nvidia himself, considering it a suitable place for the company. Founded in 2016, Hugging Face has become a platform for developers where they can find and deploy open-weight AI models, download, modify, and store them on infrastructure of their choice.