Nvidia to Acquire AI Platform Hugging Face for $12.9 Billion
Nvidia announced on Thursday that it intends to acquire the AI development platform Hugging Face in a deal worth around $12.9 billion.
This move appears to be driven by Nvidia’s belief that the rising demand for the open-source AI models provided by Hugging Face will contribute to its future growth. This is happening even as some of Nvidia’s major clients begin to create their own chips to lessen their reliance on the company.
Nvidia’s CEO, Jensen Huang, stated that Hugging Face will continue to be an open-source platform. He mentioned that it currently hosts over 3 million models, along with 500,000 datasets and about 1 million applications.
“Open models allow startups, businesses, universities, and public organizations to leverage advanced capabilities without the need to develop every model from the ground up. They help organizations find the right model for the specific task,” Huang wrote in a blog post on the day of the announcement.
Huang further elaborated, mentioning that this approach enables progress in AI to advance safely, bolster cybersecurity and sovereignty, accelerate innovation, and be applicable across various sectors like factories, hospitals, farms, classrooms, and local businesses worldwide.
The terms of the agreement indicate that Nvidia will disburse about $11.9 billion to Hugging Face shareholders, while also designating up to $1 billion in equity-based incentives for Hugging Face employees who transition to Nvidia, according to a recent filing with the Securities and Exchange Commission.
Since 2023, Nvidia and Hugging Face have collaborated to give developers access to Nvidia’s AI computing platform. Integrating Hugging Face could potentially cushion Nvidia against any downturns in demand for its chips, particularly as large customers like Meta, OpenAI, and Microsoft ramp up their own AI computing capabilities.
This transaction is projected to finalize during the first half of 2027, as noted in the filing. A risk disclosure included in the filing warns about potential government restrictions on AI models from China, which could significantly impact Hugging Face’s operations.
Hugging Face is host to numerous AI models developed not just by companies in China, such as DeepSeek and Moonshot AI, but also by creators from around the globe. The startup, located in New York, has drawn interest from investors like Intel, Advanced Micro Devices, and Amazon, and was established in 2016 by French entrepreneurs Clément Delangue, Julien Chaumond, and Thomas Wolf.
In related news, Hugging Face recently garnered attention after one of OpenAI’s models unintentionally breached a secure testing environment and compromised the platform during an experiment.
