NVIDIA Corporation (NASDAQ:NVDA) may be about to pay $12.9 billion for a company generating about $150 million in annualized revenue. On August 27, Reuters reported that Nvidia had agreed to acquire Hugging Face, citing The Information. The arithmetic is obscene at roughly 86 times sales. Neither company had publicly announced the deal when Reuters published its report, while Business Insider separately reported that discussions had not produced a signed agreement and could still collapse.
The price looks even crazier beside Hugging Face’s history. Nvidia participated in a 2023 funding round that valued the company at $4.5 billion. Hugging Face reportedly rejected a $500 million Nvidia investment last year at a $7 billion valuation. Nvidia may now be offering almost three times that 2023 valuation. At Nvidia’s latest quarterly revenue run rate, $150 million is roughly what the chip giant generates in three and a half hours.
The 86x figure doesn’t look ridiculous once Hugging Face stops looking like a normal software company. Its August 14 ecosystem report counted 2.96 million public model repositories, 1 million datasets and 1.44 million Spaces. More importantly, Hugging Face said NVIDIA and AMD were the two organizations publishing the most new open models in 2026, with more than 200 repositories each. Hugging Face itself spelled out the hardware logic: open models are a way to sell chips because models optimized for specific hardware demonstrate that the hardware works.
That makes this less like Nvidia buying $150 million of annualized revenue run rate and more like NVIDIA Corporation (NASDAQ:NVDA) buying influence over the route developers take from models to compute. Frontier AI companies are increasingly pursuing custom silicon that could reduce dependence on Nvidia GPUs. Owning a major open-model distribution and optimization layer could give Nvidia another way to keep its hardware central as that threat grows.
Nvidia has the financial firepower for it. The company ended July with $22.4 billion of cash and $34.1 billion of marketable debt securities, while generating $21.3 billion of free cash flow in Q2. The reported $12.9 billion purchase price would equal less than a quarter of those holdings.
The actual risk happens to be Hugging Face’s neutrality. Its platform works across competing hardware, and reports said the company rejected Nvidia’s earlier investment partly because it did not want one dominant investor. If ownership pushes AMD, Intel, model developers or enterprise users elsewhere, Nvidia could damage the network it is paying such an extraordinary multiple to own. The deal makes sense only if that network remains widely trusted.
Insider Monkey’s database showed 285 hedge funds long Nvidia at the end of Q2 2026, up from 275 in Q1. Fisher Asset Management held 90.94 million shares after increasing its position about 3%. As of the August 14 settlement, 285.96 million Nvidia shares were sold short, equal to 1.23% of float, with 2.52 days to cover.
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