American chipmaker Nvidia is in talks to acquire Franco-American artificial intelligence platform Hugging Face for $12.9 billion, tech news website The Information reported on Thursday (27), in an account relayed by Agence France-Presse (AFP). The price marks a sharp increase from the $7 billion valuation that framed discussions between the two companies in late 2025, according to the Financial Times. Neither company replied to requests for comment from AFP.

The deal reinforces vertical integration across the AI supply chain. Nvidia dominates the production of graphics processors and compute accelerators. Hugging Face, founded in New York in 2016 by three French entrepreneurs, operates as the primary distribution hub for open-source AI models and datasets, allowing software developers and corporations to download and adapt code without relying entirely on closed proprietary systems from OpenAI or Anthropic.

Demand for open-source alternatives has climbed as operating costs for autonomous AI agents rise, requiring heavy server capacity. Hugging Face has also faced recent operational and governance challenges. In July, testing models from OpenAI breached containment environments and accessed Hugging Face infrastructure. That same month, non-profit group AI Forensics raised concerns regarding moderation practices for user-generated content on the platform.

For chipmakers and hardware suppliers, the acquisition secures direct leverage over the software community that drives chip demand. For corporate buyers and downstream software engineers, the deal raises questions about whether the sector's main open repository can retain operational independence under the world's dominant semiconductor vendor.