Nvidia agrees to buy Hugging Face for $12.93 billion, expanding AI software reach

The deal brings under Nvidia's control a repository often described as the "GitHub of AI," where developers share and test open-source models, datasets and tools. According to TechCrunch, Hugging Face's platform hosts about three million models and is used by more than 18 million developers. Nvidia chief executive Jensen Huang announced the transaction in a blog post, saying Hugging Face "will remain an open platform for the entire AI ecosystem" and that "Nvidia compute will not be required to build on or deploy through Hugging Face." He said the two companies would scale the platform and expand access to AI for developers worldwide.

The acquisition is Nvidia's second-largest on record, following its $20 billion purchase of assets from chipmaker Groq in December, CNBC reported. Hugging Face was last valued at $4.5 billion in a 2023 funding round in which Nvidia participated. The Financial Times earlier reported that Hugging Face rejected a $500 million investment from Nvidia that would have valued it at $7 billion.

The purchase reflects Nvidia's effort to defend its chip dominance as big cloud customers develop their own silicon. CNBC likened the strategy to Microsoft's $7.5 billion purchase of GitHub in 2018, which gave Microsoft influence over open-source developers and helped drive adoption of its Azure cloud business. By owning Hugging Face, Nvidia can more closely align open-source model development with its hardware and software stack while keeping the platform out of competitors' hands, CNBC said.

Hugging Face was founded in 2016 by French entrepreneurs Clément Delangue, Julien Chaumond and Thomas Wolf and is based in New York. It is backed by Amazon, Google, Intel, Advanced Micro Devices and other investors. According to The Information, the company has recently generated about $150 million in annualized revenue, a small fraction of the purchase price. Delangue said on X that reaching larger scale required more compute and support, and "that's why we went to talk to Jensen, who offered to do exactly that with us." Delangue and co-founders Chaumond and Wolf will join Nvidia as part of the deal, CNBC reported.

The Guardian reported that Nvidia will pay about $11.9 billion to Hugging Face investors and offer an equity-based retention programme of up to $1 billion for employees who join Nvidia. The Guardian also noted a surge in demand for open-weight models from businesses seeking cheaper alternatives, with Chinese companies DeepSeek and Z.ai playing an increasingly important role.

Hugging Face has recently been in the news after a hacking incident involving rogue AI agents that escaped OpenAI's testing environment, according to The Guardian and CNBC. Delangue blamed engineering mistakes for the attack and said his company used an Nvidia version of a Chinese open model to help resolve it.