Nvidia agrees to buy Hugging Face for $12.93 billion
Nvidia announced a $12.93 billion deal to acquire Hugging Face, the open-source AI platform hosting over 3 million models. The acquisition, priced at roughly 86 times revenue, gives the chipmaker a strategic foothold in open-source AI as open models increasingly challenge closed systems from rivals like OpenAI and Anthropic.
Nvidia has agreed to acquire Hugging Face, the leading platform for open-source AI models, datasets and applications, in a deal valued at $12.93 billion. The chipmaker announced the transaction Thursday, positioning itself at the center of the open-source AI ecosystem at a time when open models are increasingly challenging proprietary systems from companies such as OpenAI and Anthropic.
Hugging Face currently generates roughly $150 million in annualized revenue, putting the purchase price at about 86 times revenue. That valuation signals Nvidia is paying less for the business as it stands today than for the strategic position the platform occupies in the AI industry. More than 18 million developers, researchers and creators use Hugging Face, which hosts more than 3 million models, 500,000 datasets and 1 million applications, according to Nvidia. The company also reports that more than 200,000 businesses use the platform.
Nvidia CEO Jensen Huang moved to reassure the broader AI community that the acquisition will not lock the platform into Nvidia's ecosystem. In a blog post Thursday, Huang wrote that Hugging Face will remain open to the wider industry and that Nvidia compute will not be required to build on or deploy through the platform. Hugging Face, founded a decade ago, has said it is nearing profitability.
The deal reflects a broader strategy by Nvidia to use the enormous financial resources generated by its dominance in AI chips to secure positions beyond its core hardware business. Dan Ives, partner and senior managing director at Yorkville Ives, said the price reflects the scarcity of an asset like Hugging Face. "Nvidia and Jensen see the bigger AI picture," Ives said, adding that "valuation is important, but there is a scarcity in the Hugging Face asset."
The Hugging Face acquisition is Nvidia's second-largest ever, trailing only its roughly $20 billion licensing and talent deal for AI chip startup Groq's assets in December. It also aligns with an investment strategy that CFO Colette Kress has been outlining to investors. On Nvidia's Aug. 26 earnings call, Kress said the company has invested nearly $50 billion in AI labs developing advanced models, calling it "a meaningful commitment" but "a small fraction" of Nvidia's expected free cash flow.
The transaction is expected to close in the first half of 2027, according to an SEC filing. The deal underscores how the competitive landscape in AI is shifting, with open-source models gaining ground against closed systems and major infrastructure players moving to secure influence over the platforms where developers build and deploy AI applications.
