NVIDIA (NVDA) is in negotiations to acquire artificial intelligence open-source community Hugging Face at a valuation exceeding $13 billion. If the deal proceeds, it would represent another major transaction in the AI middleware layer. As an open-source model platform, Hugging Face has demonstrated rapid revenue growth, but faces challenges including compromised neutrality and security vulnerabilities. Concurrently, the company is actively expanding into robotics, and its future development trajectory is drawing significant attention.
Hugging Face was founded in New York in 2016, with its initial product being a chatbot. It has since evolved into the “GitHub of the AI industry,” where developers can publish, download, and fine-tune open-source models on its platform. The platform hosts more than 3 million public models and over 1 million datasets. The company’s revenue is primarily derived from paid subscriptions, enterprise hosting, and computing services, though specific revenue figures have never been publicly disclosed.
Should the deal close at a $13 billion valuation, Hugging Face’s valuation would have nearly tripled within three years, marking another landmark event in the recent wave of AI middleware acquisitions.
For NVIDIA, bringing Hugging Face under its umbrella would help establish a stronger foothold in the developer ecosystem and potentially shift more workloads onto its chip platforms. However, NVIDIA’s ownership could also undermine one of Hugging Face’s core advantages—neutrality. The platform currently supports industry-wide models and hardware, including offerings from NVIDIA’s competitors AMD and Intel.
Notably, late last year, Hugging Face rejected a $500 million investment offer from NVIDIA, which valued the company at $7 billion. At the time, Hugging Face stated that it did not want a dominant investor that could influence decision-making.
Hugging Face’s last external funding round occurred in 2023, when it raised $235 million led by Salesforce Ventures at a valuation of $4.5 billion. NVIDIA, Google, Amazon, Intel, Qualcomm, and IBM all participated in that round, with Sequoia Capital and Lux Capital as early investors.
Hugging Face’s annualized revenue growth rate increased by 50 percent within two months, surpassing $150 million. The company generated approximately $70 million in revenue in 2023 and roughly $130 million in 2024. It currently exceeds $150 million, nearly doubling in less than two years. The company employs a freemium business model, with approximately 3 to 5 percent of users converting to paid plans, and has over 2,000 paying customers.
Hugging Face’s scope extends beyond AI platform services. In April of this year, the company acquired French humanoid robotics developer Pollen Robotics, doubling down on the open-source robotics sector in addition to its software business.
