Key highlights:

  • Nvidia said it will pay $12.93 billion to buy open-source AI platform Hugging Face
  • CEO Jensen Huang said the platform will stay an open platform for the AI space after the deal closes
  • The acquisition is Nvidia’s second-largest ever, trailing its $20 billion deal for assets from Groq last year

Nvidia confirmed Thursday that it has agreed to buy Hugging Face, an open-source AI hosting platform, for $12.93 billion in cash. Shares of the company rose 2% on confirmation of the news.

 

Nvidia’s deal terms and the scale of the platform

The confirmation comes weeks after initial reports on the deal, with Nvidia's official statement putting the final price at $12.93 billion. The platform homes over 18 million developers, researchers, and creators who use it to share about 3 million models.

Hugging Face lets researchers share open-source models along with technical assets such as training datasets. The platform hosts over 500,000 datasets and four times as many models, according to the numbers CEO Jensen Huang shared in a blog post. 

Its main revenue comes from cloud services for AI development teams. This includes a hub product that lets companies run private versions of the platform.

The deal is Nvidia’s second-largest acquisition, behind a $20 billion licensing deal with chip startup Groq last year. Before that, its biggest purchase was Israeli chipmaker Mellanox for close to $7 billion back in 2019. The transaction is expected to close in the first half of 2027.

Hugging Face CEO Clément Delangue told CNBC that his company sought Nvidia over the summer to make the acquisition happen. He called the company "a perfect home,” adding that open-source AI needed more resources and scale. 

"During the summer, I think we realized that Hugging Face and open-source AI in general was at the turning point, and that it needed more, more resources, more scale, more visibility," he said.

This comes after Nvidia shared that it would invest $3.5 billion in Taiwanese chipmaker MediaTek through convertible bonds as it expands its reach in the AI chip industry.

Wall Street analysts see a push beyond chips

Wall Street generally welcomed the news. Forrester principal analyst Naveen Chhabra said the acquisition gives the company valuable visibility into the developer space.

He noted it can now see "which models are trending, what datasets customer are downloading, and the architectures that are gaining traction weeks before they hit mainstream tech news."

BD8 CEO and investor Barbara Doran also called the purchase a "great strategic move." She added that the company could be more than just a chip supplier, which could help the company stay afloat when chip demand slows. 

CFRA Research analyst Angelo Zino added that the deal is "less about the financials" in the near term and more about building out AI ecosystem influence. He predicted that growth in that ecosystem could boost demand for the company's products. Huang shared the sentiment in an X post, adding that “every developer, startup, university, industry and country to build with, customize and benefit from AI.”