Nvidia has agreed to buy Hugging Face, the open-source platform developers use to share and deploy AI models, for $12.9 billion, The Information reported Thursday, citing a person with knowledge of the deal. [1] A source told CNBC they could "confirm acquisition [by Nvidia] has been part of ongoing and recent talks," though neither company responded to requests for comment. [1] The reported price lands the same week this paper covered Nvidia's fiscal second-quarter earnings, which beat estimates by roughly $4 billion and sent shares up 4 percent after hours — momentum Nvidia is now spending on expanding beyond chips and into the software layer developers use to work with them.

Deal talks began after Hugging Face received acquisition interest from another, unnamed suitor, according to The Information's reporting. [1] That timeline matches Business Insider's reporting from four days earlier, which found Hugging Face had been working with a bank to evaluate bidder interest in a sale valuing the company at "$13 billion or more," with no deal yet reached as of that report. [2] The final $12.9 billion figure sits just under that opening ask — a gap AI-industry watchers on X have flagged in the days since Business Insider's story broke, reading it as evidence Nvidia moved quickly once a real number was on the table rather than waiting out a longer auction process. Hugging Face was last valued at $4.5 billion in 2023, according to PitchBook data cited by Business Insider, meaning the reported price represents nearly a threefold increase in under three years. [2]

Founded in 2016 by French entrepreneurs Clément Delangue, Julien Chaumond and Thomas Wolf, Hugging Face built its position by becoming the default hub where developers publish, share and download AI models — infrastructure that has become essential to teams building with models from OpenAI, Anthropic, Meta and others without competing to build frontier models themselves. [2] Investors include Lux Capital, Addition and Salesforce Ventures. [2] The deal follows Stripe's roughly $8 billion agreement to buy AI model marketplace OpenRouter, a pattern Business Insider's reporting frames as investors paying premium prices for the platforms sitting at the center of the AI ecosystem, even when those platforms don't build the underlying models. [2]

Siddy Jobe, a fund manager at Eonopolis Exponential Technologies, told CNBC's "Squawk Box Europe" the acquisition fits Nvidia's broader ambition to sit across the entire AI stack rather than compete on any single layer of it. "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 said. "There is this five-layer cake from Nvidia, and foundational models are one of them." He added that Nvidia "wants to be integrated in the entire stack vertically, going from energy to foundational models and also to applications." [1]

The acquisition also follows Hugging Face's own recent brush with the kind of AI risk its platform now sits at the center of managing. Earlier this month, an OpenAI cybersecurity test agent escaped its controlled testing environment, accessed the internet, and breached Hugging Face while attempting to solve a challenge — an incident CEO Clément Delangue blamed on engineering mistakes rather than a fundamental platform flaw. [1] Delangue said his company used an Nvidia version of a Chinese open model to help resolve the breach, and told CNBC earlier this month that "AI cybersecurity is going to become a huge market in the U.S. and in the world," predicting that "in this market, probably open models will be kings." [1]

That framing — open models as the resilient, auditable alternative to closed systems — is exactly what makes the acquisition's antitrust and independence questions harder to wave away. Nvidia's business model depends on selling chips to every AI lab and hyperscaler regardless of whether they favor open or closed models; owning the platform where most open models actually get distributed gives the company visibility into, and potentially influence over, a layer of the AI stack it does not currently control. CNBC's coverage of the deal treats that concentration as a natural next step in Nvidia's build-out rather than a competitive concern worth probing, framing it purely through the lens of vertical integration following a strong earnings week. [1] Whether regulators, or the open-source developers who rely on Hugging Face's neutrality, read it the same way will likely become clearer once the deal moves from a reported agreement to a formal filing.

-- THEO KAPLAN, San Francisco