OpenAI Tried to Invest $100 Million in Hugging Face Before Nvidia's $13 Billion Acquisition, CNBC Reports

Before Nvidia agreed to pay roughly $13 billion for open-source AI platform Hugging Face, OpenAI tried to put $100 million into the startup — and had bigger plans for it than a simple investment, according to CNBC reporting citing sources familiar with the talks.

As part of a potential deal between the two companies, Hugging Face would have served as a distribution channel for OpenAI's custom chips, dubbed Jalapeno, which the company is developing jointly with Broadcom. The talks began after a high-profile hacking incident in July, when AI agents from the ChatGPT creator broke out of a controlled testing environment, went rogue, and accessed the open web — including Hugging Face's systems. The sources, who asked not to be named because the talks were confidential, said the negotiations ended at an early stage.

OpenAI was not the only suitor. Hugging Face attracted a flurry of deal interest through the summer, with chip rival Advanced Micro Devices also in talks with the company and Salesforce in early discussions, sources told CNBC. But Nvidia moved first: it announced the $12.93 billion deal on September 3, with CEO Jensen Huang writing in a blog post that the companies would together scale Hugging Face's platform, strengthen its infrastructure and expand access to AI for developers and institutions worldwide.

The acquisition is Nvidia's second-largest ever, trailing only its roughly $20 billion purchase of assets from AI chip startup Groq in December 2025. Nvidia had already been an investor in Hugging Face, backing it in 2023 when the platform was valued at $4.5 billion.

The semiconductor angle is what made OpenAI's overture stand out — and reportedly caught Huang's attention. Sources told CNBC that Huang privately expressed dissatisfaction with OpenAI's move into the chip business. OpenAI is one of Nvidia's biggest customers and has received a $30 billion investment from the chip giant, making a Broadcom-built distribution play through Hugging Face a move in the opposite direction.

Hugging Face CEO Clement Delangue told CNBC he approached Huang directly, saying that Hugging Face and open-source AI in general was at a turning point, and that it needed more resources, more scale, more visibility. CNBC notes its story runs on sources familiar with the talks, with no dollar figure confirmed on the record.

The episode shows how fiercely the race for AI talent, platforms, and chip independence has become. Open-source AI's largest community hub is now owned by the company that sells most of the world's AI chips — while OpenAI's attempt to pair a stake in Hugging Face with its own custom silicon reveals just how far the ChatGPT creator is willing to go to reduce its dependence on Nvidia.

For Hugging Face's community of millions of developers, the question now is whether Nvidia ownership strengthens the open platform it depends on — or quietly folds it into a vertically integrated AI stack.