Nvidia agrees to buy Hugging Face for $12.93 billion

Nvidia confirms $12.93 billion deal for Hugging Face

Nvidia has agreed to acquire Hugging Face for $12.93 billion, the company confirmed on September 3, ending weeks of speculation and placing the central hub of the open-source AI world under the industry's dominant AI chipmaker.

In the announcement, Nvidia CEO Jensen Huang said the companies will scale the platform, strengthen its infrastructure and expand access to AI for developers and institutions worldwide. He paired that with commitments meant to reassure the community: Hugging Face will remain an open platform for the entire ecosystem, developers will keep choosing their own models, frameworks, clouds, inference providers and computing platforms, and "Nvidia compute will not be required to build on or deploy through Hugging Face."

What Nvidia is buying

Founded in 2016 and frequently described by The Verge as the "GitHub" of AI, Hugging Face has become the default place to publish and discover open models. According to Nvidia's announcement, more than 18 million developers, researchers and creators use the platform, which hosts over 3 million models, 500,000 datasets and 1 million applications, while more than 200,000 companies use it to find, evaluate, customize and deploy AI.

Nvidia also stressed its existing footprint there: it calls itself the largest contributor of open models and data on Hugging Face, with more than 500 models and over 250 open datasets released to date.

From rumor to confirmed deal

According to The Verge, Business Insider reported on August 23 that Hugging Face was working with a bank to explore a sale at around $13 billion, and by August 27 that Nvidia had been in acquisition talks. The Information had separately reported that a roughly $12.9 billion agreement was already in place. Nvidia's announcement makes the deal official.

The price represents a large premium over the startup's financials. The Verge notes Hugging Face's last valuation was $4.5 billion, set in a 2023 funding round Nvidia participated in, and that the Financial Times previously reported the company rejected a $500 million Nvidia investment last year — a deal that would have valued it at $7 billion — over concerns about concentrating power in a single investor. The Information reports Hugging Face generates around $150 million in annualized revenue, a small fraction of the purchase price.

TechCrunch adds that the company has raised more than $395 million in total, including a $235 million round in 2023 led by Salesforce Ventures with participation from Google, Amazon, IBM and Nvidia. CEO Clem Delangue told TechCrunch in July that the platform's growth rate was bringing it "close to profitability."

Why each side wanted the deal

In a post on X, Delangue thanked the community for proving Hugging Face could be an alternative to closed-source APIs, but said reaching a larger scale requires "more compute, more support, more collaboration, and more visibility," which he said Nvidia offered to provide.

For Nvidia, the acquisition defends its core business. TechCrunch argues that a hardware leader in AI training and inference benefits from controlling an open ecosystem it can shape around its chips, and that Nvidia can now package its unused compute capacity with Hugging Face's enterprise offering. The Verge points to the competitive backdrop: with closed-model providers such as OpenAI, Anthropic and Google developing their own silicon, an open ecosystem that runs overwhelmingly on Nvidia hardware helps protect its dominance. On its recent earnings call, per TechCrunch, Huang noted that almost all open models already run on Nvidia hardware.

The deal also extends Nvidia's open-model strategy. Huang coauthored an open letter arguing open weights broaden access to AI and keep leadership distributed across companies and institutions. TechCrunch notes the Wall Street Journal reported a $6 billion deal with coding startup Poolside last month to develop open models, and that Nvidia has said it has put more than $50 billion into frontier AI labs.

Why it matters

Hugging Face is the distribution layer of the open-weight ecosystem, and it now belongs to the company that sells most of the compute that ecosystem runs on. Nvidia's promises — hardware neutrality, multi-cloud and multi-accelerator support, openness to every model builder — will be tested by millions of developers who can leave if the platform tilts.

There is an evident irony in the price: a company that reportedly rejected a single dominant investor a year ago to protect its independence has now sold itself outright to the largest player in AI compute. And at roughly $12.9 billion against about $150 million in annualized revenue, the deal values distribution and developer mindshare, not current earnings. If the openness commitments hold, open-source AI gains Nvidia's infrastructure and global reach; if they erode, the community that built Hugging Face's value will be watching for alternatives.