Nvidia Set to Acquire Hugging Face in $12.9 Billion AI Deal

New Delhi, August 27, 2026; Nvidia is reportedly preparing to acquire artificial intelligence startup Hugging Face for around USD 12.9 billion, in what could become one of the chipmaker’s largest acquisitions, according to a report by The Information cited by Reuters.

Hugging Face has emerged as a major platform for the AI industry, offering access to open-source models, datasets and development tools. The proposed acquisition would give Nvidia greater control over an important part of the AI software ecosystem as technology companies increasingly explore alternatives to Nvidia’s dominant graphics processing units.

The reported valuation marks a sharp rise for Hugging Face. The startup was valued at approximately USD 4.5 billion following a USD 235 million funding round in 2023 that included Nvidia, Alphabet’s Google and Salesforce among its investors.

Nvidia has significantly expanded its investments across the artificial intelligence sector in recent years. The company has backed several AI businesses, including OpenAI, as competition intensifies over computing infrastructure and the development of proprietary AI chips.

The latest reported deal also follows a security incident involving Hugging Face last month. According to the report, an OpenAI model was involved in an incident that resulted in a compromise of parts of the startup’s infrastructure.

The acquisition comes as Nvidia continues to report strong financial performance driven by sustained demand for AI computing. For the second quarter of fiscal 2027, the company posted revenue of USD 96.2 billion, representing a 106 per cent increase from the same period a year earlier and an 18 per cent rise from the preceding quarter.

Nvidia’s Data Center business remained the key growth engine, generating USD 89 billion in revenue during the quarter, up 117 per cent year-on-year and 18 per cent sequentially.

The company reported GAAP and non-GAAP gross margins of 75 per cent. GAAP diluted earnings per share stood at USD 2.46, while non-GAAP diluted earnings per share were USD 2.22.

Nvidia has forecast revenue of approximately USD 108 billion, with a two per cent margin on either side, for the following quarter. The company has also announced a quarterly dividend of USD 0.25 per share, payable on October 1 to shareholders registered as of September 10.

If completed, the Hugging Face transaction would further strengthen Nvidia’s position beyond AI hardware and deepen its presence across the software and open-source AI landscape.