Nvidia leaders have often said the company is more than just a chip maker. Buying the AI development platform Hugging Face for about $14 billion could help prove their point.
Nvidia may reach a deal this week to buy privately owned Hugging Face for $12.9 billion, plus another $1 billion in incentives to keep employees, according to Bloomberg. Nvidia and Hugging Face did not respond to requests for comment. Nvidia’s shares rose slightly in early trading.
This deal was expected based on earlier reports, but it is still a big step. Hugging Face is a popular platform for sharing millions of AI models, and now Nvidia will control it directly. Nvidia already owns a stake in Hugging Face, along with Amazon, Google, Salesforce, Intel, and other tech giants. According to the Financial Times, Hugging Face once rejected a smaller offer from Nvidia because it did not want any one investor to have too much control. This time, Nvidia made a bigger, more decisive offer.
UBS said this deal shows Nvidia’s ongoing move beyond hardware, as it works to build a full AI platform for developers, data, models, and deployment. UBS called the strategy compelling, since it could help support open-source model development and deployment on Nvidia’s systems.
Major cloud companies like Amazon and Google may push back against this move, but that competition may be part of Nvidia’s motivation. By owning Hugging Face, Nvidia can offer its AI models, hardware, and computing power to more developers. This could help Nvidia stay important even as customers start making their own custom chips.
Circular Technologies pointed out that as big cloud companies and AI labs build their own custom chips, AI infrastructure is becoming more vertically integrated. They said that if Nvidia owns more of the software and developer ecosystem, it will be much harder to replace, even as other hardware gets better.
Nvidia will probably present this deal as part of its larger support for open-source AI, where users can freely download and change models. This is different from companies like OpenAI and Google, which usually keep their models more restricted. Nvidia already shares its own open-model family, Nemotron, on Hugging Face.
Still, Nvidia has to balance two things: convincing developers that Hugging Face will stay open, and showing investors that the deal will pay off. If Nvidia does not manage this well, Hugging Face’s open reputation could end up showing how much control Nvidia has in AI.
Nvidia has already succeeded as a chip company. Now, its next test is to show it can also do well as an AI model developer, cloud provider, and platform operator.
