Nvidia is reportedly pursuing a nearly $13 billion acquisition of Hugging Face, a deal that could give the world’s dominant AI-chip company control of one of the most important distribution hubs for open AI models.

But whether a deal has actually been signed remains unclear.

The Information reported that Nvidia agreed to acquire Hugging Face for $12.9 billion, citing a person familiar with the matter. Business Insider reported that the companies had discussed a deal worth more than $13 billion but said no agreement had been signed and the talks could still fall apart.

A source familiar with the discussions separately confirmed to CNBC that an Nvidia acquisition had been part of ongoing and recent talks.

As of Aug. 30, neither Nvidia nor Hugging Face has publicly announced an acquisition.

Nvidia already has ties to Hugging Face:

The two companies aren’t strangers.

Nvidia participated in Hugging Face’s $235 million funding round in 2023, which valued the company at $4.5 billion. Other investors included Salesforce, Google, Amazon, IBM and Intel.

More recently, Nvidia reportedly offered to invest another $500 million at a roughly $7 billion valuation. Hugging Face rejected that proposal because it did not want one investor gaining too much influence over the company.

A purchase near $13 billion would therefore represent a dramatic change in that relationship — and nearly triple Hugging Face’s 2023 valuation.

Why Nvidia may want it now:

The potential acquisition fits Nvidia’s push to expand beyond selling GPUs.

Major AI companies are increasingly developing their own chips to reduce their dependence on Nvidia hardware. Open models represent a different part of the AI ecosystem: developers downloading and deploying those models still need substantial computing power, often provided by Nvidia GPUs.

Hugging Face also offers infrastructure for developers to run models using rented computing resources. Ownership could therefore give Nvidia another route into cloud AI services while strengthening its relationship with developers building outside closed platforms.

There is a financial dimension as well. Hugging Face was reportedly generating roughly $150 million in annualized revenue recently and approaching profitability. Against that figure, a $12.9 billion purchase price would represent an enormous premium — suggesting Nvidia would be buying Hugging Face primarily for its strategic position in AI rather than its current revenue alone.

The bigger question: What happens to Hugging Face’s neutrality?

Hugging Face has functioned as a relatively neutral platform used across the AI industry. Its ecosystem isn’t limited to Nvidia technology; developers working with competing hardware and models also rely on it.

Putting that platform under Nvidia would raise an obvious question: Can Hugging Face remain an industry-wide hub while being owned by one of the industry’s most powerful companies?

That question could also draw regulatory attention. A deal would combine Nvidia’s enormous position in AI computing with one of the most important platforms for distributing and deploying open models.

What to watch next:

For now, the distinction between a reported agreement and a completed acquisition matters.

There has been no public acquisition announcement from Nvidia or Hugging Face, and reporting conflicts over whether a definitive agreement has been signed.

The next meaningful development would be confirmation from either company, regulatory filings, or additional reporting establishing that a definitive agreement has been executed.

Until then, Nvidia’s potential $12.9 billion purchase of Hugging Face should be treated as a reported deal — not a completed acquisition.