Nvidia agrees to buy Hugging Face for $12.9 billion, reports

Nvidia is buying AI company Hugging Face for $12.9 billion, according to a report in tech publication The Information .

The deal would give Nvidia a major foothold in open-source AI at a moment when open-source developers are increasingly closing the gap with closed systems from companies such as Anthropic and OpenAI.

Hugging Face is a repository that hosts open-source AI models, as well as benchmark evaluations, and data sets used for AI training and testing.

The deal would also help Nvidia protect its dominant position in AI chips, which has been somewhat under threat as major tech companies like OpenAI, Google, Amazon and Anthropic build out their own chips to reduce their reliance on Nvidia hardware.

That’s because those who download open-source models from Hugging Face need to host and run those models on their own computing infrastructure, which usually involves Nvidia’s GPUs, either on premise or hosted in the cloud.

Hugging Face also uses Nvidia GPUs to run the paid hosting services it offers developers.

A strong open-source ecosystem gives customers more options outside the closed labs and keeps more of the market tied to Nvidia’s hardware.

Nvidia has already invested tens of billions of dollars in its own open-source models.

The acquisition would also mark a return for Nvidia to cloud computing, a business it reportedly scaled back roughly a year ago.

Owning Hugging Face could also give the tech company a way to offload unused cloud capacity from the computing deals it has guaranteed for customers.

Business Insider, which first reported over the weekend that Hugging Face was fielding takeover interest, reported that the talks had not yet produced a signed agreement and could still fall apart.

The Information cited an unnamed source it said had knowledge of the deal’s successful conclusion.

Fortune could not independently verify the reports.

Nvidia and Hugging Face did respond to requests for comment.