SANTA CLARA: Nvidia has agreed to acquire open-source artificial intelligence platform Hugging Face for $12.9 billion, The Information reported Wednesday, citing a person with knowledge of the deal.
The transaction talks began after Hugging Face, a platform used by developers to collaborate on and share AI tools, received acquisition interest from another suitor, according to The Information. Business Insider separately reported that Nvidia had been “in talks” to acquire the startup and that Hugging Face had recently worked with a bank to evaluate bidders’ interest.
If completed, the acquisition would place one of the most widely used repositories for open-source AI models under Nvidia’s ownership, expanding the chipmaker’s reach further into the software and AI model ecosystem.
Nvidia, whose shares rose 4% in after-hours trading Wednesday following its quarterly earnings report, has made several deals in the past year, including a $20 billion licensing agreement with AI chip startup Groq.
Siddy Jobe, a fund manager at Eonopolis Exponential Technologies funds, said the move aligns with Nvidia’s strategy. “I think Nvidia is very much a community, a platform-based company, and in that respect, I think Hugging Face fits perfectly within that,” Jobe told CNBC’s “Squawk Box Europe” on Thursday. He added that Nvidia aims to integrate across the entire AI stack, “going from energy to foundational models and also to applications.”
Hugging Face was recently targeted in a hacking incident that raised concerns about AI security. CEO Clément Delangue attributed the attack to engineering mistakes and said his company used an Nvidia version of a Chinese open model to resolve it. Delangue told CNBC earlier this month that “AI cybersecurity is going to become a huge market” and that “open models will be kings” in that space.
The acquisition news follows Nvidia’s better-than-expected fiscal second-quarter results. The company reported adjusted earnings of $2.22 per share on revenue of $96.22 billion, topping analyst estimates of $2.10 per share and $92.17 billion, according to LSEG.
Chief Financial Officer Colette Kress said on a call with analysts that Nvidia expects fiscal 2028 revenue growth of 70%, above analysts’ forecast of 44%. She said customer forecasts “point to our growth doubling next year” but noted that guidance reflects supply constraints.
Net income more than doubled to $53.95 billion, or $2.22 per share, from $24.76 billion, or $1.87 per share, a year earlier.
Nearly four years after the launch of OpenAI’s ChatGPT, Nvidia continues to see robust growth, with revenue more than doubling from $46.7 billion in the same quarter last year. The company’s chips remain essential for building advanced AI models, and Nvidia has increasingly provided financial backing to support new AI data centers.
However, after a three-year rally, investor enthusiasm has tempered this year. Shares have risen about 13% as of Wednesday’s close, slightly outperforming the Nasdaq. Nvidia faces growing competition from Advanced Micro Devices, Google and others, while rising memory costs, driven by a global shortage, persist as a challenge.
