Nvidia's $13 Billion Hugging Face Deal Unfinalized After CEO Exit

By Tom Whitfield

Nvidia's $13 billion Hugging Face deal remains unfinalized after CEO Jensen Huang resigned Thursday. Interim CEO Colette Kress now inherits the company's open-model commitments and two major AI transactions.

Huang's departure followed his admission of an affair with Alice Huang, a Megaspeed executive and alleged Chinese spy. The episode raises US national-security questions and renews scrutiny of Huang's support for softer chip export controls on China.

What does this change for developers and enterprise buyers?

Developers and enterprise buyers face a continuity test, not a change to the announced transaction list. Kress inherits an unfinished acquisition and an open-model commitment whose public champion has left.

Her approach to the Hugging Face deal and open models remains unclear. Open-source community members expect a more cautious successor, while founder-driven priorities tend to lose ground after leadership changes.

Two transactions define the interim chief executive's inherited brief:

• Hugging Face: Nvidia has not finalized its $13 billion acquisition of the open-source platform.
• Poolside: Nvidia agreed to pay $6 billion for a non-exclusive license for open AI coding startup Poolside's technology.

Hugging Face CEO Clem Delangue said in an X post that the company would "continue to fight for open source, whatever happens next." His answer protects the target's mission. It does not settle whether the $13 billion deal closes.

The commercial logic

Huang framed open-source AI as useful for safety, innovation, diffusion and sovereignty. He also saw it as a way to broaden Nvidia's customer base beyond a few frontier laboratories.

As frontier AI labs increasingly reduce their reliance on Nvidia and build their own chips, open models widen the potential customer pool. Nation-states, enterprises and any organization that wants to own its models can become buyers of Nvidia hardware.

More developers training, fine-tuning and running models means more GPUs sold and less dependence on a handful of frontier laboratories. Major customers including Google and OpenAI are developing their own chips, which increases rather than reduces Nvidia's need for a broad developer ecosystem.

Open source was therefore business infrastructure with a policy argument attached. Nvidia still needs the developers and their open AI ecosystem, whatever the Washington debate.

Within Nvidia, Huang pushed development of the Nemotron family of open-weight AI models. These targeted long-running agentic AI systems and reasoning workloads, with the potential to compete against closed frontier models.

He also backed Reflection AI and Thinking Machines Lab. His influence reached beyond Nvidia's investments and product roadmap into the companies seeking to make American open models more competitive.

Washington enters the frame

Earlier this year, Huang wrote an open letter signed by 25 companies, including Microsoft, Meta, IBM and Palantir. It urged the US government not to over-restrict open-weight AI models, many of which come from China.

Washington was debating how to respond to allegations that Chinese AI labs steal intellectual property from American counterparts such as Anthropic and OpenAI. Both reportedly appealed directly to Washington for stronger protections, and both advocate tighter restrictions on advanced models for safety reasons.

Huang's visibility and Nvidia's market power made him the strongest counterweight to those closed-model arguments. Open-source advocates now lose their most prominent voice in Washington.

The export-control exposure

The scandal puts renewed scrutiny on Huang's efforts to loosen chip export controls. His exit could strengthen advocates seeking tougher restrictions on Chinese AI companies, including limits on Chinese open-weight models.

Those restrictions could weaken competition for American companies, whose most powerful model developers keep their models closed. The trade-off now sits inside a company run on an interim basis.

Nvidia had not responded to a request for comment before publication. Open source was never merely sentiment at Nvidia; it was business strategy and a political position, with Huang's fingerprints on both.

His successor inherits the business strategy. The political position now lacks an obvious champion.