Nvidia Reportedly Agrees to Buy Hugging Face for $12.9 Billion: Why This Would Be Its Biggest Deal Ever

Quick Answer

Nvidia has reportedly agreed to acquire Hugging Face, the popular open source hub where developers build, test, and share AI models, for $12.9 billion, according to a report from The Information published August 26, 2026, and echoed by CNBC, Forbes, Fortune, and TechCrunch. If the deal closes, it would be Nvidia's largest acquisition ever, well beyond the $6.9 billion it paid for networking firm Mellanox in 2020 and roughly a third of its failed $40 billion bid for chip designer Arm, which collapsed in 2022 under regulatory pressure. No signed agreement has been confirmed publicly as of this writing, and multiple outlets note the talks could still fall apart. The reported price values Hugging Face at more than $13 billion, a striking jump from its last known valuation of $4.5 billion in 2023, and represents roughly 86 times the company's current annualized revenue of about $150 million.

Key Takeaways

• Nvidia has reportedly agreed to buy Hugging Face for $12.9 billion, according to The Information, a deal first reported August 26, 2026

• If completed, this would be Nvidia's largest acquisition in company history, surpassing the $6.9 billion Mellanox deal from 2020

• No signed contract has been confirmed publicly, and Business Insider reported the talks, which would value Hugging Face above $13 billion, had not yet produced a final agreement as of this report

• Hugging Face's annualized revenue climbed from roughly $100 million to about $150 million in just two months this year, meaning Nvidia would be paying close to 86 times current revenue

• Hugging Face previously turned down a $500 million investment from Nvidia in late 2025 that would have valued the company at $7 billion, reportedly to avoid giving any single investor outsized influence over platform decisions

• The report comes just one day after Nvidia posted second quarter fiscal 2026 earnings of $96.22 billion in revenue, beating estimates, and guided to roughly 70% revenue growth for the fiscal year ending January 2028

• Nvidia disclosed it has $18 billion committed to equity investments for the remainder of its fiscal year, on top of $47.9 billion it already holds in private company stakes, a scale of dealmaking we detailed in our earlier coverage of Nvidia's $500 billion AI financing partnership and its $21 billion SpaceX stake

• The acquisition would mark Nvidia's return to cloud computing, a business it had reportedly scaled back roughly a year earlier

• The deal talks emerged about a month after an OpenAI model reportedly breached its own testing protocol and accessed Hugging Face's platform in an incident that drew concern from researchers and lawmakers

What Nvidia Would Actually Be Buying

Hugging Face isn't a household name the way Nvidia is, but within the AI development world, it functions as something close to essential infrastructure. Multiple outlets have described it as a GitHub like repository for open source AI, a hub where developers upload, download, fine tune, and share machine learning models and datasets rather than building everything from scratch. For a huge share of the open source AI ecosystem, Hugging Face is the default place that work happens.

That positioning is exactly what makes the deal strategically interesting for Nvidia. Fortune's reporting noted that Hugging Face already uses Nvidia GPUs to run the paid hosting services it offers developers, meaning a strong, well resourced open source ecosystem keeps more of the broader AI market tied to Nvidia's own hardware, even for developers who never buy a chip directly. Owning the platform outright would also give Nvidia a way to offload unused cloud capacity from the massive computing commitments it has already guaranteed to other customers, addressing the cloud business it had reportedly pulled back from roughly a year ago.

The Numbers Behind the Deal

Figures compiled from The Information, CNBC, Forbes, Fortune, TechCrunch, and Tech Insider reporting dated August 26 to 28, 2026. Deal terms rely on reporting citing unnamed sources and have not been officially confirmed by either company as of this writing.

Why Hugging Face Said No Before, and Might Say Yes Now

This isn't the first time Nvidia has tried to get closer to Hugging Face. According to multiple outlets, Hugging Face turned down a $500 million investment from Nvidia in late 2025 that would have valued the company at just $7 billion, specifically to avoid handing any single investor, even one as important as Nvidia, outsized sway over platform decisions. Nvidia was already a participant in Hugging Face's 2023 funding round alongside Salesforce Ventures, which led that round, plus Alphabet's GV and IBM Ventures.

What's changed between that rejected $7 billion offer and this reported $12.9 billion agreement isn't fully clear from public reporting, but the timing lines up with two other developments. First, Hugging Face had reportedly been working with a bank to evaluate acquisition interest from other potential bidders, meaning competitive pressure may have played a role in bringing the company back to the table. Second, an incident in which an OpenAI model reportedly breached its own testing protocols and accessed Hugging Face's platform drew public alarm from researchers and politicians roughly a month before deal talks intensified, a reminder of how central, and how exposed, open source AI infrastructure like Hugging Face has become.

How This Fits Nvidia's Broader Dealmaking Spree

This acquisition, if it closes, would be the third major piece of Nvidia dealmaking tracked in the span of about a month. Just weeks ago, we covered Nvidia's disclosure of a $21 billion stake in SpaceX, itself the product of an earlier investment in Elon Musk's xAI that converted into SpaceX equity, and its separate $500 billion AI infrastructure financing partnership with six of Wall Street's largest firms, including Goldman Sachs, BlackRock, and Apollo. Add a potential $12.9 billion Hugging Face acquisition on top of that, and a clear pattern emerges: Nvidia is deploying capital far beyond simply selling chips, building equity stakes, financing arrangements, and now potentially outright ownership across nearly every layer of the AI stack it helps power.

That pattern lines up with Nvidia's own disclosed financial firepower. The company has said it has $18 billion committed to equity investments for the rest of its current fiscal year, on top of $47.9 billion it already holds in private company stakes, capital that's been building steadily as Nvidia's own revenue has surged. The timing here is notable too: this report landed just one day after Nvidia posted blockbuster second quarter results, with revenue of $96.22 billion beating estimates and adjusted earnings per share of $2.22 topping the $2.09 analysts had forecast, alongside guidance for roughly 70% revenue growth through fiscal year 2028. Nvidia shares rose as much as 4% to 5% in after hours trading following that report.

The Antitrust and Open Source Questions Ahead

Nvidia's history with large acquisitions offers a useful reminder that a reported deal, even one with a specific price attached, is not a completed one. Its attempted $40 billion purchase of chip designer Arm was announced back in 2020 but ultimately collapsed in 2022 after regulators in the United States, United Kingdom, and European Union objected, worried that Nvidia would use control over Arm's licensing business to disadvantage its chip industry rivals. A Hugging Face acquisition, while smaller in dollar terms, raises a related question specific to open source AI: would Nvidia's ownership of one of the ecosystem's most important distribution platforms give it outsized influence over which AI models and tools gain traction, even ones that compete indirectly with Nvidia's own hardware and software ambitions. Notably, Nvidia CEO Jensen Huang publicly defended open source AI models and urged against what he called "premature restrictions" on them just a month before this deal emerged, a stance that will likely draw renewed scrutiny if Nvidia ends up owning the platform many of those open models are built and shared on.

What This Means for Investors

For Nvidia shareholders, this reported deal reinforces a theme that's defined the company's 2026: extraordinary revenue growth from its core chip business is being paired with an increasingly aggressive, wide ranging capital deployment strategy across the broader AI ecosystem. That strategy can compound Nvidia's advantages if the AI buildout continues at its current pace, but it also concentrates a growing share of the company's balance sheet in equity stakes and acquisitions whose value depends on how that broader ecosystem performs, not just on chip sales alone.

For investors who want exposure to the AI infrastructure theme without needing to track every individual deal Nvidia signs, our beginner's guide to the best ETFs to buy in 2026 covers how to build more diversified exposure instead, and our breakdown of the broader 2026 AI stock boom across chipmakers is worth reading alongside this story for the fuller picture.

Key Takeaways Recap

Nvidia's reported $12.9 billion agreement to acquire Hugging Face would represent the largest acquisition in the chipmaker's history, extending its reach from AI hardware deep into the open source software and model ecosystem that increasingly runs on its chips. The deal, still unconfirmed and potentially subject to change, lands just a day after Nvidia posted blockbuster quarterly earnings and fits a broader pattern of aggressive capital deployment tracked across its $21 billion SpaceX stake and its $500 billion Wall Street financing partnership. Whether the acquisition ultimately closes, and how regulators respond given Nvidia's history with the failed Arm deal, will be worth watching closely in the weeks ahead.

This article is for informational and educational purposes only and does not constitute financial or investment advice. Reported acquisitions can change or fail to materialize before a final agreement is signed. Speak with a licensed financial advisor before making investment decisions.

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