Nvidia buys Hugging Face for $12.93 billion in its biggest acquisition ever

Nvidia is buying Hugging Face for $12.93 billion, its biggest acquisition ever and a deal that gives the AI chip giant control of one of the most important distribution hubs in artificial intelligence.

The agreement takes Nvidia far beyond the GPUs that made it one of the most valuable companies on the planet. Hugging Face sits much closer to developers, hosting more than 3 million AI models, roughly 500,000 datasets and more than 1 million applications used by a community of over 18 million people and 200,000 companies.

Nvidia CEO Jensen Huang announced the deal Thursday, saying the companies plan to scale Hugging Face and strengthen its infrastructure.

“I’m excited to announce that NVIDIA has agreed to acquire Hugging Face for $12,930,300,000. Together, we will scale Hugging Face’s platform, strengthen its infrastructure and expand access to AI for developers and institutions worldwide.”

The purchase comes with a big promise: Hugging Face is supposed to remain open.

“Hugging Face will remain an open platform for the entire AI ecosystem. Developers will choose the models they want, the frameworks they want, the clouds and inference service providers they want and the computing platforms they want. NVIDIA compute will not be required to build on or deploy through Hugging Face,” Huang said.

That commitment could become one of the deal’s most closely watched parts. Hugging Face has built much of its influence by serving developers across competing hardware, cloud and model ecosystems. Nvidia now owns the platform, creating a tension between the chipmaker’s commercial interests and Hugging Face’s role as a neutral meeting ground for AI developers.

“Nvidia has agreed to buy AI model platform Hugging Face for $13bn, in the latest step by the $5.4tn chip giant to use its financial might to accelerate the technology’s boom while exerting greater control over the industry,” The Financial Times reported.

The FT said the purchase surpasses Nvidia’s $6.9 billion Mellanox acquisition in 2020, making Hugging Face its largest takeover to date.

Nvidia is moving beyond the chip

The strategic logic goes deeper than owning another AI company.

Nvidia already dominates the accelerators used to train and run many of the industry’s largest models. Hugging Face gives it a position in the layer where developers discover models, download them, fine-tune them, compare them and put them into production.

That matters more as some of Nvidia’s biggest customers work on their own AI silicon.

Owning Hugging Face gives Nvidia a direct connection to a huge developer community regardless of which model eventually wins. Open-weight AI may matter most here. Developers can download and modify these models rather than depend entirely on closed platforms operated by companies such as OpenAI and Anthropic.

Nvidia has spent years promoting that ecosystem. Buying Hugging Face turns the company from a participant into the owner of its most influential distribution platform.

The transaction includes about $11.9 billion for Hugging Face shareholders and up to $1 billion in equity-based retention incentives for employees joining Nvidia, according to reporting on the agreement. The acquisition is expected to face regulatory review before closing.

From $4.5 billion startup to $12.93 billion acquisition

The price marks an extraordinary rise for a company founded in 2016 by Clément Delangue, Julien Chaumond and Thomas Wolf.

TechStartups covered that funding round three years ago, on August 24, 2023, when Hugging Face raised $235 million at a $4.5 billion valuation, becoming one of the most valuable independent machine-learning platforms. Salesforce Ventures led the round, with Nvidia, Google, Amazon, IBM, Intel, AMD, Qualcomm, and Sound Ventures among the investors.

Three years later, Nvidia is paying almost three times that valuation to own it.

That tells a bigger story about where value is accumulating in AI. Chips remain the foundation of Nvidia’s business, yet controlling compute alone may no longer be enough. Models, developers, distribution and deployment are becoming strategic territory too.

Hugging Face gives Nvidia all four.

The acquisition could strengthen Nvidia’s position across the AI stack, but its success may rest on something money cannot automatically buy: trust. Developers embraced Hugging Face as a place where competing models, frameworks, and hardware could coexist.

Nvidia now has to prove that buying the platform does not change what made it valuable in the first place.