Nvidia Corp. is advancing toward a roughly 14 000 millones de dólares acquisition of AI platform Hugging Face, according to reports from Bloomberg, marking a major expansion by Chief Executive Officer Jensen Huang beyond hardware and into the software ecosystem built on top of the company’s chips.
The potential transaction involves approximately 12 900 millones de dólares for the platform itself, alongside about 1000 millones de dólares dedicated to employee retention, as reported by Bloomberg. While negotiations are in advanced stages, an official, definitive agreement has not yet been finalized.
Deepening Ties to the AI Developer Community
The possible acquisition deepens Nvidia’s financial and operational ties to the artificial intelligence community. Portfolio manager Sara Araghi of Franklin Templeton told Bloomberg that Nvidia is actively supporting AI firms that require funding, describing the corporate maneuvers as ecosystem building rather than circular financing.
Unlocking New Cloud Service Infrastructure
Hugging Face operates a cloud resource rental business that could grant Nvidia an additional pathway to cloud services, according to reporting by The Information. This infrastructure could assist in delivering the computing capacity that Nvidia has already committed to support financially.
Countering Dominance by Proprietary Chipmakers
Jensen Huang has actively encouraged the development of open-source models, a strategy designed to prevent the artificial intelligence landscape from becoming entirely dominated by a small cohort of major cloud clients who also manufacture proprietary chips, according to Bloomberg.
Navigating Past Valuation Pushback and Power Concentration
Hugging Face previously raised a 235 millones de dólares Series D funding round in 2023, which included Nvidia as a minority investor. Afterward, the startup reportedly turned down a subsequent 500 millones de dólares investment offer from Nvidia at a 7000 millones valuation over concerns regarding concentrated influence, as detailed by industry reports. In 2024, Hugging Face Chief Executive Officer Clément Delangue publicly warned that the concentration of power represents the primary risk facing the artificial intelligence sector.
Weighing Steep Multiples Against Developer Neutrality
At the proposed 12 900 millones de dólares valuation, Nvidia would be paying approximately 86 times the annualized revenue of Hugging Face, which generates roughly 150 millones per year. This multiple indicates that the valuation stems largely from the platform’s central role among developers and its prominent position within the open-source community rather than its current sales figures.
Analyst Brad Gastwirth noted to Bloomberg that the primary risk facing the integration is maintaining neutrality, warning that Nvidia must avoid damaging the reputation of Hugging Face as an open platform for all developers.