Nvidia Confirms $12.9 Billion Hugging Face Acquisition in Defensive AI Move
Nvidia confirmed plans to acquire Hugging Face for $12.9 billion, in a deal analysts call a defensive move to keep the leading open-source AI model hub independent and gain early visibility into AI development trends.
The acquisition would be Nvidia’s second-largest, trailing only the $20 billion it paid for chipmaker Groq’s assets, CNBC reported. Nvidia CEO Jensen Huang said the price reflected the need to fend off other bidders, but he declined to identify them. “It doesn't matter who the other bidders were,” he told CNBC. “It only matters who wins.”
Hugging Face has become a leading platform for building, sharing and running AI models, particularly open-weight models that developers can edit and self-host. Nvidia said more than 18 million people use the platform to share over 3 million models and 500,000 datasets, and more than 200,000 companies use it. Huang said half of Nvidia’s business is “really largely driven by open models,” and that Nvidia is the largest contributor of open models in the world “by far.”
Gil Luria, head of technology research at D.A. Davidson, called Hugging Face “one of the most important parcels of real estate in the AI market.” He compared the startup to GitHub before Microsoft bought the software repository for $7.5 billion in 2018. “One of the learnings from that transaction was that allowing a tech giant to acquire an important repository puts everybody else at a disadvantage,” Luria wrote, making Nvidia’s purchase a defensive move. If one of the big AI labs, or worse Google, owned Hugging Face, “it would be in a position to slow down open source AI in the U.S., which would allow the big labs to increase their power,” he added.
The deal also gives Nvidia a window into how AI developers are working. “Nvidia gains visibility into customers’ preferences and the AI models they use,” Naveen Chhabra, principal analyst at Forrester, told CNBC. “They can see which models are trending, what datasets customers are downloading, and the architectures that are gaining traction weeks before they hit mainstream tech news.”
CCS Insight research director Ian Fogg said the acquisition extends Nvidia’s strategy of encouraging a broad range of AI models to prosper, from proprietary frontier models to open-weight models. Nvidia has increasingly built financial stakes across the AI industry and helped fund GPU purchases, and now it is seeking to own one of the AI sector’s main hubs outright.