Nvidia is reportedly acquiring Hugging Face, the AI model and open-source platform, in a defensive move to protect the U.S. open-source AI ecosystem, according to DA Davidson.
Hugging Face, founded by three French entrepreneurs in New York, operates a repository and suite of tools for AI models and datasets. Its estimated recurring revenue stands at $150 million. The platform has been compared to GitHub before Microsoft’s 2018 acquisition, a deal that later prompted Google to back GitLab as an alternative. DA Davidson suggests Nvidia’s move is designed to prevent hyperscalers or large AI labs from gaining control of Hugging Face, which could otherwise slow the development of open-source AI in the United States.
Semiconductor companies and cloud providers stand to benefit from the continued growth of open-source AI, the firm noted. The acquisition aligns with broader industry concerns over consolidation in the AI ecosystem, where hyperscalers and major labs increasingly dominate access to critical infrastructure and tools.
Hugging Face recently participated in an OpenAI-led safety demonstration, collaborating with independent researchers to showcase how AI agents could identify and exploit vulnerabilities on the platform. The exercise was part of ongoing efforts by OpenAI and Anthropic to highlight AI safety risks and the need for robust safeguards.
Anthropic has taken a different approach, partnering with Salesforce to steer corporate clients toward its proprietary token models and away from open-source alternatives. This strategy contrasts with the open-model ethos of platforms like Hugging Face, which emphasize accessibility and community-driven development.
The report follows Nvidia’s recent market performance, with shares closing at $217.55 on August 28, down 4.57%, before edging up 0.14% in after-hours trading to $217.86.
