Nvidia has agreed to buy Hugging Face, the GitHub-like repository that has become the default home for open-source AI models, for $12.9 billion, according to a report from The Information that was quickly matched by multiple outlets. It's the largest acquisition in Nvidia's history and one of the biggest bets yet on open-source AI infrastructure.

Hugging Face has become essential plumbing for the AI industry: developers use it to host, share and download open-weight models the way software engineers use GitHub for code. That business, though, comes with an unusual twist for Nvidia — it wasn't always a welcome suitor.

Hugging Face turned down a $500 million investment from Nvidia last year that would have valued the company at $7 billion, reportedly because its leadership didn't want a single dominant investor with that much sway. The startup last raised outside money in 2023, a $235 million round led by Salesforce Ventures that valued it at $4.5 billion. This time, Nvidia isn't offering a stake — it's buying the whole thing outright, according to CNBC's reporting on the deal.

Why Nvidia wants it

The strategic logic is straightforward, if a little self-reinforcing. Nearly every open-source model downloaded from Hugging Face has to be hosted and run somewhere, and that computing almost always runs on Nvidia GPUs. Fortune's writeup frames the purchase as Nvidia protecting its chokehold on AI infrastructure at a moment when several of its biggest customers — Amazon, Google, Microsoft and Meta among them — are racing to build their own custom AI chips to cut their Nvidia bills.

Owning the open-source distribution layer would give Nvidia visibility into which models are gaining traction before they scale, and a direct relationship with the millions of developers who rely on the platform daily. It also lands at a pointed moment for the open-source ecosystem, which has been closing the performance gap with closed, proprietary systems from labs like OpenAI and Anthropic.

The deal comes just a day after Nvidia's own blockbuster earnings report sent its stock — and the broader chip sector — surging, with CEO Jensen Huang telling investors the AI buildout is still in its early innings.

HUGGING FACE HOSTS HUNDREDS OF THOUSANDS OF OPEN-SOURCE AI MODELS AND HAS BECOME THE DE FACTO STANDARD FOR SHARING THEM

Reaction from the AI community has been mixed. Hugging Face has built its reputation partly on being a neutral, developer-first platform independent of any single chipmaker or cloud provider — a status some fear could erode under Nvidia ownership, even if day-to-day operations stay hands-off. Rivals are also watching closely: OpenAI unveiled its own custom inference chip this week, claiming performance gains over Nvidia's Blackwell architecture, part of a broader industry push to reduce reliance on Nvidia silicon.

The transaction has not yet closed and would likely draw antitrust scrutiny given Nvidia's dominance in AI chips and Hugging Face's central role in model distribution. Terms of the deal, including whether it's an all-cash transaction, haven't been fully disclosed. Nvidia has not issued a formal statement confirming the reported price tag.