- Nvidia is reportedly in talks to buy Hugging Face, a move that could give it more control over open AI models, datasets and developer relationships
- Analysts are split on whether an Nvidia-Hugging Face deal would help or hurt open source AI
- The rumored acquisition lands as Nvidia posts massive revenue growth, with Data Center revenue more than doubling YoY
Nvidia is reportedly in talks to acquire open-source AI model hub Hugging Face for around $13 billion. While it’s far from a done deal, analysts appear to be split on whether it’s a smart move.
Hugging Face is an independent platform that serves as a repository for open AI models, data sets and libraries, and fosters a community of developers. Think of it like GitHub, but for AI instead of code.
Tekonyx Founder and Chief Research Officer Sid Nag told Fierce that the rumored deal is about Nvidia gaining control of a key distribution layer for AI. Acquiring Hugging Face would give Nvidia “direct access to the developers, models, datasets and deployment activity driving AI adoption.” It would also strengthen Nvidia’s position, extending it from hardware and software further into models and deployments, he said.
Asked if that would be a good thing for the open-source community, Nag said it could be, although he acknowledged there are concerns.
“It is positive for open-model funding and adoption but potentially negative for ecosystem neutrality,” he said. “The acquisition could accelerate open-model adoption by giving Hugging Face substantially more capital, compute capacity and enterprise support…. The concern is that an important neutral marketplace could gradually become an Nvidia-centered distribution channel.”
Moor Insights and Strategy CEO and Chief Analyst Patrick Moorhead said it’s hard to know exactly how things will play out since the deal isn’t official. However, he said it could be “a way for Nvidia to get more closely aligned with developers.”
Fierce has reached out to Nvidia for comment on the reports and will update this story if we hear back.
Jason Andersen, Moor Insights and Strategy VP, added that Nvidia has long been a contributor to Hugging Face, posting its open-weight models and other testing tools on the platform. "My guess is that Huggingface is where NVIDIA sees the bulk of its downloads and developer interaction," he said. So in that way, the deal makes sense: Nvidia gets a marketplace for its customers and access to the open community, while Hugging Face gets to carry on its movement.
"There are about 3 MILLION models up there right now, so the big question for me is how Nvidia will create a business model for 3rd party models and data sets," Andersen said. He added that while some might worry about a big tech co owning an open source hub, that has worked out just fine for GitHub (owned by Microsoft) and Red Hat (IBM).
Is it a good match?
Not everyone is so optimistic.
David Linthicum, Founder of Linthicum Research, noted in a LinkedIn post he doesn’t see Nvidia and Hugging Face as a good match. And unlike acquiring another hardware company, the deal isn’t additive in a straightforward way.
“Here's what I see: two very different companies trying to come together to create a 1+1=3 scenario, when I believe the end state is going to be 1+1=1.2,” he wrote. “The cultural DNA is different. The go-to-market is different. The customer relationships work differently. And frankly, the value creation mechanisms are fundamentally misaligned.”
Linthicum wasn’t alone; others on the platform offered similar takes.
Nvidia earnings
Reports of the Hugging Face deal came as Nvidia reported blowout fiscal Q2 2027 earnings, with revenue up 106% year on year to $96.2 billion and profit more than doubling to $59.7 billion.
Data Center revenue made up $89 billion of the revenue total, while edge computing accounted for the remaining $7.2 billion.
Asked on the company’s earnings call if he sees the rise of open models as being good for Nvidia or not, CEO Jensen Huang said “The world will need both closed models and open models. Both closed models and open models are skyrocketing in use.”
He continued: “So long as models succeed, I'm very happy. Both closed and open models are going to succeed, and they're both simultaneously driving our sales.”
This kind of philosophy is exactly what Futurum Group Research Director Brendan Burke said could drive the rumored deal. "The cheaper and easier it makes open models to run, the more total inference the market consumes, expanding open usage and the compute underneath it at the same time," he told Fierce. "Owning the distribution layer just lets Nvidia pour resources into the flywheel it already benefits from.
As for what the deal might mean for major Nvidia rivals like AMD, Burke said the bar has been raised. He noted AMD has spent years pushing the idea that open models shouldn't be tied to a vendor's software, offering up its open ROCm software as an answer. But in the same time, Nvidia has basically created a seamless stack from chip to software to models.
"AMD's answer can't just be that open models run on ROCm. It has to make that path as turnkey as Nvidia's from one-click deployment to routing and serving, or developers will keep defaulting to the stack where everything already works together," he concluded.
Read more about open source AI here:
T-Mobile says open AI models aren’t just about cost — they’re about fit
GSMA warns telcos against outsourcing AI future to hyperscalers
Open models are driving AT&T’s AI ‘tokenomics’ strategy
Open-weight AI cuts costs and lock-in — with a catch
Red Hat: AI’s foundation must be open source
Editor's note 9:30 am ET 8/28/26: This story has been updated to add comments from Jason Andersen and Brendan Burke.