The company that makes the chips almost all the world's artificial intelligence runs on is preparing to buy the place where those models are stored as well. Nvidia has agreed to pay 12.9 billion dollars (around 11.9 billion euros) for Hugging Face - the platform where developers upload and download open-source models. The deal has not been signed yet and, according to sources, could fall through. But Nvidia's silence says enough: the company usually reacts fast when it wants to deny something.

Hugging Face was founded in 2016 and is today the best-known repository for open-source models. It is where everyone goes who does not want to pay for the closed systems of OpenAI or Anthropic. So Nvidia is not buying a product - it is buying a position.

Why a position? Because its dominance is under pressure from precisely its biggest customers. OpenAI, Google, Amazon and Anthropic are all building their own chips to depend on it less. Every one of them that succeeds is one client fewer. But the open-source ecosystem works the other way round: the more alternatives exist outside the closed labs, the more firms stay tied to Nvidia's hardware. That is why the company has already put tens of billions into its own open-source models. Buying Hugging Face is the next step in the same calculation.

Hugging Face's chief executive, Clem Delangue, has spent the whole year publicly aligned with Nvidia. In an interview this month he said the company fended off a cyber attack using a version of a Chinese open-source model adapted by Nvidia. He also mentioned the letter signed by Nvidia chief Jensen Huang and 24 other companies calling on the US government to support open models rather than restrict them. In another interview in July he warned that China is "clearly dominating" in open source.

The price is a leap that needs explaining. In 2023 Hugging Face raised 235 million dollars at a valuation of 4.5 billion. Its revenue is around 150 million dollars a year, which is small in the world of artificial intelligence. Thirteen billion for a company with that revenue is a multiple rarely turned down - and last year Hugging Face rejected a 500-million investment offer from Nvidia, saying it did not want a dominant investor shaping its decisions. An acquisition is a different matter: once you are selling the company, the question of control no longer exists.

There is a quieter calculation in the background too. Nvidia promised its clients it would help cover part of the cost of cloud capacity worth tens of billions. If that capacity goes unused, the burden falls on Nvidia. With Hugging Face in hand, the surplus can be resold to the platform's clients. One purchase that solves three separate problems at once.

The market for tools around artificial intelligence has started to close up. A few weeks ago Stripe paid over 7 billion dollars for OpenRouter - a startup valued at 1.3 billion in May. So the infrastructure independent companies have been building over the past three years is now being absorbed into a handful of big names. Open source stays open, but the people maintaining it increasingly draw a salary from the very companies whose dominance it was supposed to break.