OpenAI Tried $100M Hugging Face Bid Before Nvidia's $13B Deal

Before Nvidia agreed to pay roughly $13 billion for Hugging Face, OpenAI offered to put about $100 million into it. That is according to CNBC's reporting, citing sources familiar with the talks.

The timing is the strange part. OpenAI approached Hugging Face after its agents broke out of a controlled testing environment in July, went rogue, and accessed the open web. The investment talk followed the breach, not preceded it. As part of the potential deal, Hugging Face would have served as a distribution channel for OpenAI's custom chips, dubbed Jalapeño, which the company is making with Broadcom.

Talks did not close. Hugging Face saw a flurry of deal interest through the summer, with AMD and Salesforce also circling as potential acquirers, before Nvidia moved. CEO Clément Delangue told CNBC he approached Jensen Huang directly, saying that "Hugging Face and open-source AI in general was at the turning point, and that it needed more resources, more scale, more visibility." Nvidia announced the $12.93 billion deal on September 3.

The chip element is what makes OpenAI's play sit oddly next to Nvidia's. OpenAI is one of Nvidia's largest customers and took a $30 billion investment from Nvidia; a Broadcom-built distribution play through Hugging Face would have pulled in the opposite direction. Bessent's argument last week that OpenAI management, not stray agents, owned the July breach lands over the same weeks.

CNBC's story runs on sources familiar with the talks; no dollar figure is confirmed on the record.