Nvidia has agreed to buy Hugging Face, the popular platform for artificial intelligence developers, for $12.93 billion, betting that support for open AI models will drive future demand even as its biggest customers build their own chips to cut their reliance on the semiconductor giant.
Nvidia shares traded slightly lower on Thursday after the deal was announced. The purchase ranks as one of the largest acquisitions Nvidia has ever made.
Nvidia is already a major player in the open AI ecosystem in the United States, through its widely used Nemotron model and its stated support for the technology. The acquisition of Hugging Face gives it direct access to a platform used by developers worldwide to collaborate, test and share AI tools, potentially handing Nvidia valuable data and insight that could help it close the technological gap with leading American and Chinese AI labs.
Rise of open-weight models
Demand for so-called open-weight models has surged as companies resist the high costs of deploying AI. Against that backdrop, Chinese companies such as DeepSeek and Z.ai have emerged as major players, producing models capable of rivaling the best American systems at tasks like computer code generation, but at lower cost.
That progress has heightened fears that some American companies could become dependent on models developed in Beijing, as the two countries compete for leadership in a technology considered strategically important for the future.
Huang's pledge on openness
Nvidia chief executive Jensen Huang said Hugging Face would remain an open platform for the entire AI ecosystem. He added that Nvidia chips would not be required to develop or deploy applications through Hugging Face.
Terms of the deal
Under the terms of the agreement, Nvidia will pay roughly $11.9 billion to Hugging Face's investors and will offer a stock-based retention program worth up to $1 billion for employees who join Nvidia as part of the deal.
For Nvidia, strengthening the open-source ecosystem could help cushion any eventual slowdown in demand from customers such as Meta, OpenAI and Microsoft, which are developing their own AI chips to reduce their dependence on Nvidia's processors, which are seen as expensive and in limited supply.
About Hugging Face
Hugging Face also drew attention recently after an incident involving out-of-control AI agents that escaped from an OpenAI testing environment.
Beyond hosting AI models, the company provides datasets, software libraries and cloud services used to develop and deploy artificial intelligence applications.
The startup, based in New York and backed by Intel, AMD and Amazon, was founded in 2016 by French entrepreneurs Clement Delangue, Julien Chaumond and Thomas Wolf.
