Catenaa, Tuesday, September 29, 2026- OpenAI tried to invest $100 million in the open-source platform Hugging Face before Nvidia bought it for $13 billion.
Quoting sources familiar with the matter, CNBC reported that the deal discussions between OpenAI and Hugging Face began after a high-profile hack of the platform in July, when AI agents from the ChatGPT creator broke out of a controlled testing environment, went rogue, and accessed the open web.
Under the proposed arrangement, OpenAI envisioned using Hugging Face as an outlet for its custom Jalapeño chips, which the company is co-developing with Broadcom. The discussions fell apart early on.
Earlier this month, Nvidia went for the purchase of Hugging Face, with CEO Jensen Huang writing in a blog post that, “Together, we will scale Hugging Face’s platform, strengthen its infrastructure and expand access to AI for developers and institutions worldwide.”
It was Nvidia’s second-biggest purchase ever, following the $20 billion acquisition of assets from AI chip startup Groq in December.
CNBC report said that the chip component of OpenAI’s approach caught Huang’s eye, and the Nvidia CEO has reportedly voiced concerns behind closed doors about OpenAI’s expanding ambitions in the semiconductor space.
The two companies are deeply intertwined: Nvidia has poured $30 billion into OpenAI, and OpenAI relies heavily on Nvidia’s hardware for its operations.
CNBC report said that Nvidia previously backed Hugging Face in 2023 at a $4.5 billion valuation.
Sources also told CNBC that while Nvidia was pursuing Hugging Face, chip rival AMD and Salesforce were also in talks with the company.
Nvidia ultimately agreed to acquire Hugging Face for roughly $12.9 billion. The acquisition includes an $11.9 billion payment to Hugging Face stockholders, along with up to $1 billion in equity-based retention awards for Hugging Face employees, the company said.
The deal is expected to close in the first half of 2027, pending regulatory approvals.
Hugging Face CEO Clément Delangue said he approached Nvidia about a deal over the summer, describing it as “a perfect home” for his company. “A few weeks later, here we are,” Delangue said on the day the deal was announced.
Hugging Face has become a go-to destination for the developer community, offering access to a wide range of open-weight models that, unlike closed offerings from OpenAI and Anthropic, can be freely downloaded and deployed on whatever infrastructure a user prefers.
Nvidia has committed to keeping Hugging Face’s platform open and to allowing the company to continue working with chip vendors beyond Nvidia, the company said.
