Nvidia to Acquire Hugging Face for $12.9 Billion in Major Open-Source AI Bet

Nvidia has agreed to acquire Hugging Face for approximately $12.93 billion, marking one of the chipmaker’s largest acquisitions and giving it a much deeper foothold in the software and open-source side of artificial intelligence. Nvidia CEO Jensen Huang announced the deal Thursday, confirming weeks of reports that the companies were negotiating a transaction.

The acquisition represents a major expansion beyond Nvidia’s traditional role as the dominant supplier of AI chips. Hugging Face operates one of the world’s largest platforms for AI models, datasets and applications, giving Nvidia direct access to a massive community of developers building the next generation of AI systems.

Hugging Face has more than 18 million developers, researchers and creators using its platform. The company hosts more than 3 million AI models, 500,000 datasets and roughly 1 million applications, while more than 200,000 companies use its tools to discover, customize and deploy AI technology.

Huang said Nvidia plans to scale Hugging Face’s infrastructure while preserving the platform’s open nature. Under Nvidia’s stated plans, developers will continue to be able to choose their preferred models, frameworks, cloud providers, inference services and computing platforms rather than being required to use Nvidia hardware.

“That is how AI can scale sustainably into billions of everyday tasks,” Huang said in announcing the transaction, describing Hugging Face as a central home for the open-model developer community. Nvidia said its infrastructure and engineering resources could help improve the platform’s reliability, safety, model evaluation and deployment capabilities.

The deal had been rumored for weeks before Nvidia formally confirmed it. Reuters previously reported that Nvidia had agreed to acquire Hugging Face for roughly $12.9 billion, while other reports indicated the companies were moving toward a transaction after Hugging Face had attracted takeover interest.

The acquisition also highlights how important open-source and open-weight AI models have become. Unlike proprietary systems controlled by companies such as OpenAI and Anthropic, open models can be downloaded, modified and adapted by developers and businesses, potentially lowering costs and giving organizations greater control over how AI systems are built.

For Nvidia, that ecosystem has strategic value because much of the open-model development happening through Hugging Face ultimately requires significant computing resources. By becoming more deeply embedded in the software layer, Nvidia can potentially strengthen demand for its processors while reducing its dependence on a relatively small group of enormous AI customers.

The transaction includes approximately $11.9 billion to be paid to Hugging Face shareholders, along with an equity-based retention program worth up to roughly $1 billion for Hugging Face employees who join Nvidia. The deal is expected to close during the first half of 2027, subject to regulatory approvals and other customary closing conditions.

Still, the acquisition could raise questions about Hugging Face’s neutrality. The platform supports developers using hardware from Nvidia as well as competing semiconductor companies, and maintaining that independence will be critical to preserving its appeal. Nvidia has explicitly committed to keeping Hugging Face open and supporting other silicon vendors, making that promise a key part of the deal.

The acquisition ultimately gives Nvidia influence over a much broader portion of the AI stack, from the chips powering AI workloads to the models, datasets and developer tools used to create them. As competition intensifies between open and proprietary AI systems, Nvidia’s $12.9 billion investment in Hugging Face signals that the company believes controlling infrastructure alone may not be enough to maintain its position at the center of the AI economy.