San Francisco: Nvidia has agreed to acquire artificial intelligence platform Hugging Face for $12.93 billion, expanding the chipmaker's reach into AI models, software and the developers building the technology.
The agreement, announced on September 3, is one of Nvidia's largest acquisitions and reflects the growing importance of the software and developer ecosystem alongside the computer chips that power artificial intelligence.
The transaction is not yet complete. Nvidia and Hugging Face entered into the definitive agreement on September 2, and the deal is expected to close in the first half of 2027, subject to regulatory approval and other closing conditions.
Under the agreement, Nvidia will pay about $11.9 billion to Hugging Face shareholders. It will also offer an equity based retention programme worth up to approximately $1 billion for Hugging Face employees who join Nvidia.
Hugging Face is a major platform in the open AI ecosystem. It allows developers, researchers and companies to share and work with AI models, datasets and applications. The platform has become an important place for developers to find, test and adapt models for different uses.
Nvidia said more than 18 million developers, researchers and creators use Hugging Face. The platform hosts more than 3 million models, more than 500,000 datasets and more than 1 million applications. More than 200,000 companies use the platform, according to Nvidia.
The acquisition would give Nvidia a stronger position beyond the hardware at the centre of its business. Nvidia has become the leading supplier of advanced AI accelerators used to train and run many of the world's leading AI systems.
Hugging Face operates closer to the model and developer layers of the AI industry. Its platform supports open source and open weight models that can be downloaded, adapted and deployed by developers under their respective licences.
The growth of these models has increased competition with proprietary AI systems operated by companies such as OpenAI and Anthropic. Businesses and developers are increasingly looking at open models because they can provide greater flexibility and, in some cases, lower deployment costs.
Nvidia has said Hugging Face will remain an open platform after the acquisition. Developers will continue to be able to choose their models, frameworks, cloud providers, inference service providers and computing platforms.
Nvidia has also said its own computing technology will not be required to build on or deploy through Hugging Face. The platform will continue to support development and deployment across multiple computing systems.
That promise is likely to be closely watched because Nvidia is also the dominant supplier of AI accelerators. The acquisition gives the company ownership of a platform where developers choose models and technologies that can operate across different hardware systems.
There is currently no indication that Nvidia plans to restrict competing hardware on Hugging Face. However, how the company's hardware neutrality commitment will work in practice after the acquisition remains an important question.
The transaction will also face regulatory review. Nvidia has said the deal is expected to close in the first half of 2027, subject to regulatory approval and other conditions.
Geopolitical issues could also affect the platform. Nvidia has warned that some popular open AI models originate in China and that future government restrictions could affect the availability or distribution of models and datasets on Hugging Face.
The acquisition also comes as major technology companies seek to reduce their dependence on Nvidia's processors by developing their own AI chips. Companies including Meta, OpenAI and Microsoft are investing in their own computing technology.
For Nvidia, expanding its presence in open AI software and developer services could help the company maintain a close relationship with organisations building AI systems, even as competition in AI hardware increases.
Hugging Face was founded in 2016 by French entrepreneurs Clément Delangue, Julien Chaumond and Thomas Wolf. The New York based company was valued at about $4.5 billion in a 2023 funding round, when it raised $235 million from investors including Salesforce, AMD and Amazon.
The new transaction is substantially higher than that previous reported valuation and highlights the increasing commercial importance of the infrastructure surrounding AI models.
For Nvidia, the deal is about more than acquiring another technology company. It would give the chipmaker a larger role in the ecosystem where AI models are developed, shared and deployed.
The acquisition could therefore become an important example of how competition in artificial intelligence is expanding across the technology stack, from chips and computing infrastructure to models, software and the developers who build AI applications.