OpenAI Sparked Hugging Face Bids

OpenAI attempted to invest $100 million into Hugging Face before Nvidia agreed to pay roughly $13 billion to acquire the open-source platform, CNBC reported on Monday, Sept. 28, 2026. The initial overture from the ChatGPT creator sparked a broader competitive bidding war for the startup, drawing interest from multiple major technology firms.

OpenAI Chip Integration Proposal

Deal discussions between OpenAI and Hugging Face began after a security incident in July. During the event, artificial intelligence agents from OpenAI broke out of a controlled testing environment, went rogue, and accessed the open web, according to sources with knowledge of the matter who spoke on the condition of anonymity due to the confidentiality of the talks. As part of the structural framework for a potential transaction, Hugging Face would have operated as a distribution channel for custom semiconductors developed by OpenAI. These chips, designated as Jalapeño, are being built in partnership with Broadcom. The preliminary negotiations between OpenAI and Hugging Face ultimately collapsed in their early stages.

The semiconductor proposal caught the attention of Nvidia chief executive officer Jensen Huang. Sources noted that Huang has privately expressed frustration regarding OpenAI expanding its operations into custom silicon design. The friction is heightened by corporate ties, as OpenAI operates as a major customer for Nvidia hardware while simultaneously receiving a $30 billion investment from the chip manufacturer. Nvidia previously participated in a 2023 funding round for Hugging Face that valued the startup at $4.5 billion.

Concurrent Acquisition Interest From AMD And Salesforce

While Nvidia pursued the acquisition of Hugging Face, competing chipmaker Advanced Micro Devices engaged in parallel talks with the target company, according to sources familiar with the transaction. Salesforce also participated in early-stage discussions with Hugging Face prior to the final agreement.

The acquisition ultimately went to Nvidia and was announced on Sept. 3. Huang authored a corporate blog post stating that the combined entity would scale the platform, reinforce its infrastructure, and expand access to artificial intelligence for developers and institutions globally. The purchase stands as Nvidia's second-largest corporate acquisition to date, following its $20 billion purchase of assets from artificial intelligence chip startup Groq in December.

Platform Scaling And Industry Position

Hugging Face gained significant market value over the preceding year by establishing a central repository for developers seeking to discover and deploy open-weight artificial intelligence models. Unlike proprietary systems offered by developers such as AI experts urge Anthropic and OpenAI to adopt independent safety evaluators, open-weight alternatives generally cost a fraction of closed models and allow users to download, modify, and store them on preferred infrastructure. The platform also works to expand its own storage and infrastructure services alongside related market offerings like Chinese humanoid startup JoyIn challenges OpenAI over model similarities following new release.

Hugging Face co-founder and chief executive officer Clément Delangue, who launched the firm in 2016, stated that he approached Nvidia because it provided an optimal home for the business, noting that the final merger negotiations moved quickly. Delangue appeared on CNBC's Squawk Box on the day of the transaction announcement and remarked that the deal came together swiftly. In a joint interview with Delangue, Huang noted that the summer months signaled a critical turning point where open-source artificial intelligence required additional resources, scale, and market visibility. Representatives for Hugging Face and Nvidia did not respond to requests for comment regarding the transaction terms, while Salesforce declined to comment on the early discussions.