Nvidia Nears $14 Billion Hugging Face Deal This Week

An agreement by Nvidia to acquire Hugging Face for $12.9 billion may be reached as soon as this week, said one of the people, who asked not to be identified because the details are private. The deal may include a $1 billion retention package for Hugging Face employees, the person said.

A final agreement hasn't been reached and the timing or details could still change, the people said. Representatives for Nvidia and Hugging Face declined to comment.

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Buying Hugging Face would be the biggest move yet in Chief Executive Officer Jensen Huang's push to broaden the uptake of artificial intelligence and extend his customer list. The deal would give Nvidia control of one of the key platforms where developers showcase and share AI models.

Huang is committed to helping foster so-called open source models to avoid the technology of a few large companies - ones that currently provide him with the biggest chunk of his revenue but who are also all forging ahead with their own chip projects - coming to dominate AI.

Nvidia is already a backer of Hugging Face, alongside Alphabet Inc.'s Google, Amazon.com Inc., Intel Corp. and Salesforce Inc., among others.

Founded in 2016, Hugging Face operates a platform for sharing AI models that can be used freely by others. The startup was valued at $4.5 billion in a funding round three years ago. Nvidia's talks with the company were reported earlier by Business Insider.

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Hugging Face, which makes AI software and hosts it for other companies, was at the center of a cybersecurity incident in which a model being tested by OpenAI inadvertently hacked the platform. The breach raised alarms about the safety of cutting-edge AI technology.

OpenAI has said it could have reacted sooner to prevent the attack on Hugging Face's systems.

Nvidia has struck several deals in the past year, including a $6 billion licensing agreement in August with startup Poolside that included extending job offers to many of that company's employees. Nvidia also paid about $20 billion for most of the chip startup Groq.

Nvidia, the world's most valuable company, is the leading maker of AI accelerators, the chips that help train and operate models. It has gradually added a variety of other technologies, including software, with the goal of expanding the AI economy.

The Santa Clara, California-based company gave a surprisingly strong sales forecast for fiscal 2028 last week, saying revenue would grow about 70%.