Nvidia announced on Thursday that it has agreed to acquire Hugging Face, a widely used platform for open-source artificial intelligence models, for $12.93 billion. The transaction includes approximately $11.9 billion payable to Hugging Face stockholders and up to $1.0 billion in equity-based retention for employees joining Nvidia. The acquisition is expected to close in the first half of 2027, pending regulatory approvals and other customary closing conditions.
Hugging Face serves more than 18 million developers, researchers, and creators, hosting over 3 million models, 500,000 datasets, and 1 million applications. Over 200,000 companies utilize the platform to discover, assess, customize, and deploy AI models. Nvidia stated that Hugging Face will continue to operate as an open platform for the entire AI ecosystem. This commitment includes allowing developers to choose their preferred models, frameworks, cloud providers, inference services, and computing platforms. Nvidia CEO Jensen Huang explicitly stated that Nvidia's compute will not be required to build on or deploy through Hugging Face.
The deal represents one of Nvidia's largest acquisitions to date and expands its strategy beyond hardware into broader AI infrastructure. Nvidia has been a significant contributor to Hugging Face, having released more than 500 models and over 250 datasets on the platform. Hugging Face CEO Clément Delangue reportedly approached Huang earlier this summer to discuss the company's next phase, leading to the acquisition.
Industry observers note that the acquisition strengthens Nvidia's position in the AI market. While Nvidia dominates the AI hardware market, this move provides it with a foothold in the open-model ecosystem. This could help Nvidia expand the use of open-source models and create additional demand for its computing infrastructure. The acquisition follows a trend of major technology companies investing in AI model infrastructure, with Stripe's recent acquisition of OpenRouter also highlighting the strategic value of platforms connecting model makers and users.
Nvidia's commitment to maintaining Hugging Face's neutrality is a key aspect of the announcement. The company's SEC filing specifies that Hugging Face will continue to support other silicon vendors. This pledge aims to address potential concerns about a chipmaker owning a central repository for open-source AI models. Analysts from Morningstar view the deal as both an offensive and defensive move, improving Nvidia's standing within the open-source community and potentially offering a competitive edge if major customers develop their own AI chips.
The acquisition comes after Hugging Face had been seeking wider merger and acquisition interest, with reports valuing the company at $13 billion or more. Nvidia's previous valuation of Hugging Face in a 2023 funding round was $4.5 billion. The significant increase in valuation underscores the growing importance of open-source AI platforms. The Hugging Face team will join the Nvidia organization while retaining its brand and continuing its work on the project.