During the Nvidia earnings call, CEO Jensen Huang called investments in leading AI companies a “once in a generation opportunity” and said his only “regret” was not investing more and sooner.
- Hugging Face hosts open-source AI models and datasets and provides tools and cloud services for developers.
- The deal could strengthen Nvidia’s position against closed AI platforms from OpenAI and Anthropic.
- Hugging Face could also give Nvidia another avenue to deploy AI computing capacity through its cloud business.
Nvidia (NVDA) shares rallied in early morning trade on Thursday after the AI bellwether’s second-quarter earnings beat Wall Street estimates, while CEO Jensen Huang’s comments on AI investments and the reported $12.9 billion acquisition of Hugging Face put the company’s broader strategy in focus.
“Investing in these [Anthropic, OpenAI] companies are once in a generation opportunity,” Huang said during the earnings call. “I think the only regret that I have is that I didn't invest more and sooner. And both of the companies will likely go public soon, and others will follow.”
Now, Nvidia is reportedly taking a much larger bet on the infrastructure supporting open-source AI. The Information reported that Nvidia has agreed to acquire Hugging Face, a platform that hosts open-source AI models and datasets, for $12.9 billion.
NVDA stock rose nearly 6% in pre-market trade and was among the top trending tickers on Stocktwits at the time of writing. Retail sentiment around the AI bellwether rose to ‘extremely bullish’ from ‘bullish’ over the past day, with chatter rising to ‘extremely high’ from ‘high’ levels. Platform data showed an over 400% message volume jump in the last 24 hours.
Nvidia Expands Its Open-Source AI Strategy
Hugging Face is often compared with GitHub for AI. Developers use the platform to share, discover and download models and datasets, while the company also provides tools and cloud services for running AI applications.
The deal would give Nvidia greater control over a major part of the open-source AI ecosystem at a time when models from companies such as OpenAI and Anthropic are largely closed source.
Nvidia has already has history Hugging Face. It participated in the company's $235 million funding round in 2023, which valued the startup at $4.5 billion. The reported acquisition price would therefore represent a substantial increase in value in less than three years.
Hugging Face Could Help Nvidia Return To AI Cloud
According to The Information’s report, the acquisition could also give Nvidia a path to resurrect its AI cloud business.
Nvidia previously operated DGX Cloud, allowing customers to access its AI computing infrastructure through cloud providers. According to the report, Nvidia had committed billions of dollars to cloud capacity and could potentially use Hugging Face to help put that capacity to work.
That could become particularly relevant given Nvidia's growing commitments to customers. The company disclosed during its earnings report that it had $99 billion in equity investments and had committed another $25 billion. It also has significant credit-support commitments tied to AI infrastructure.
According to the report, the acquisition of Hugging Face could also serve as a back-up plan for Nvidia, potentially providing another channel for deploying that capacity to AI developers and businesses if customers don’t use all the computing capacity that Nvidia has helped finance.
Nvidia Pays A Premium For AI Ecosystem Access
The reported $12.9 billion price tag is substantial relative to Hugging Face's current revenue. According to The Information, the startup was generating about $150 million in annualized revenue, up from roughly $100 million a few months earlier. That would put the reported purchase price at roughly 86 times annualized revenue.
Open-source AI has gained momentum, with Chinese developers such as Z.ai, Moonshot AI, and DeepSeek releasing more advanced models and increasing competition with OpenAI and Anthropic.
Chinese artificial intelligence company Z.ai released a new model Wednesday that the company claims runs only on homegrown semiconductors. The company said the model runs entirely on 100,000 China-made chips to handle all online requests to use GLM-5.3-Flash.
Meanwhile, Chinese AI startup Moonshot AI is reportedly in early talks with Microsoft (MSFT), Amazon (AMZN) and Alphabet’s Google (GOOGL) over revenue-sharing agreements that would allow the three U.S. cloud giants to host its Kimi K3 model.
The news of the acquisition also comes as the Trump administration is reportedly mulling over fresh tariff plans on the chip industry.
Read also: Nvidia Earnings Send Chip Stocks Higher, But Reported New Trump Tariff Plans Could Broaden The Trade Fight
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