Nvidia reportedly nears $12.9B acquisition of Hugging Face

Nvidia is reportedly close to acquiring Hugging Face for about $12.9 billion. The company was valued at$ 4.5 billion in its 2023 funding round. It rejected a Nvidia investment offer last year that would have valued it at $7 billion.

Hugging Face is the main hub where developers share and download open-source models. Buying it would give Nvidia direct control of that distribution layer at a time when open-weight models are closing the gap with closed systems from OpenAI and Anthropic.

Closed labs are building their own chips to reduce dependence on Nvidia. A strong open-source ecosystem creates more alternatives to those closed systems and keeps a larger share of the market running on Nvidia hardware. It also gives Nvidia a path back into cloud computing and a way to absorb unused capacity from the large compute deals it has underwritten.

Pressure is coming from multiple directions. Chinese labs are successfully running frontier models on domestic chips. The latest example is Z.ai’s GLM-5.3-Flash (previously the anonymous Ox Alpha model that topped OpenRouter usage charts). The company says the entire preview traffic ran on a cluster of roughly 100,000 Chinese accelerators, with hardware efficiency and per-token cost reaching levels comparable to mainstream Nvidia GPUs.

At the same time, OpenAI’s first custom inference chip, Jalapeño (built with Broadcom), has posted strong early results. SemiAnalysis ran its InferenceX suite in OpenAI’s lab and reported that Jalapeño delivers higher tokens per watt than Nvidia’s Blackwell systems across multiple open models, with lower latency. It is a generalised inference chip, not limited to OpenAI’s own models.

Successful large-scale inference on non-Nvidia hardware weakens the assumption that frontier models must run on CUDA. Controlling the primary distribution layer for open models is one way to respond.

The deal is not yet signed and could still fall apart. If it closes, it would be one of Nvidia’s largest acquisitions and a major consolidation of the open-model infrastructure layer.