# OpenAI reportedly offered Hugging Face $100M before Nvidia’s $13B deal

Digest AI · Business & Funding · published 2026-09-28T18:47:21Z

Canonical: https://digestai.news/story/openai-reportedly-offered-hugging-face-100m-before-nvidias-13b-deal

## Summary

OpenAI made an early $100 million investment offer to Hugging Face in August, before Nvidia’s $13 billion acquisition was announced on September 3. Sources say the talks included plans for Hugging Face to distribute OpenAI’s custom AI chips, called Jalapeño, developed with Broadcom. The discussions collapsed early, one source said, as Nvidia’s CEO, Jensen Huang, reportedly took notice of OpenAI’s semiconductor push—Huang has privately criticized OpenAI’s entry into chips, though the two companies remain major partners, with Nvidia investing $30 billion in OpenAI and backing Hugging Face at a $4.5 billion valuation in 2023.

Nvidia’s deal, its second-largest ever after the $20 billion Groq acquisition, positions the chipmaker as a dominant player in AI infrastructure. Meanwhile, Hugging Face’s open-weight AI models—cheaper, customizable alternatives to proprietary models—have grown in demand, prompting its CEO, Clément Delangue, to seek Nvidia’s scale. AMD and Salesforce were also reportedly in early talks with Hugging Face before Nvidia won the bid. Delangue called Nvidia ‘a perfect home’ for the company, citing its resources and visibility as critical for open-source AI’s growth.

## Key points

- OpenAI reportedly offered Hugging Face $100M in August to distribute its Jalapeño chips
- Nvidia’s $13B acquisition of Hugging Face surpasses its $20B Groq deal and $4.5B 2023 investment
- Hugging Face’s open-weight AI models drive demand for its infrastructure and developer tools

## Why it matters

The failed OpenAI bid and Nvidia’s acquisition highlight the race for AI infrastructure control, with open-source platforms like Hugging Face becoming key assets for scaling models and chips. Nvidia’s dominance in AI hardware could further consolidate its market position, while OpenAI’s chip ambitions may face hurdles without direct distribution channels.

## Sources

1. [OpenAI sparked Hugging Face bids with early investment offer ahead of Nvidia's $13 billion deal](https://cnbc.com/2026/09/28/openai-spark-hugging-face-bid-war-early-investment-bid-ahead-of-nvidia.html) (CNBC Technology, 2026-09-28)

Part of the developing story: [Nvidia's Massive AI Ecosystem Expansion](https://digestai.news/thread/nvidia-s-70-revenue-growth-outlook-explained-by-jensen-huang) (5 stories)

## Cite

Digest AI, "OpenAI reportedly offered Hugging Face $100M before Nvidia’s $13B deal", 28 September 2026, https://digestai.news/story/openai-reportedly-offered-hugging-face-100m-before-nvidias-13b-deal

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