Nvidia announced the deal on 3 September. The company will pay around $11.9 billion to Hugging Face’s shareholders, with a further $1 billion earmarked for an employee retention programme. The deal is expected to close in the first half of 2027, following the receipt of the necessary regulatory approvals.
Hugging Face was founded in 2016 and has created one of the largest platforms for the development, sharing and deployment of open-source artificial intelligence models. According to Nvidia, the platform is used by more than 18 million developers, researchers and creators, as well as over 200,000 companies. It hosts more than 3 million models, 500,000 datasets and 1 million applications.
For Nvidia, the acquisition signifies an even deeper foray into the software and development side of the AI market. The company has traditionally held a dominant position in the supply of computing accelerators for artificial intelligence; however, major technology firms, including Meta, Microsoft and OpenAI, are simultaneously developing their own AI chip solutions.
Reuters views the deal with Hugging Face as an attempt by Nvidia to diversify its business and strengthen its position within the open-model ecosystem.
Nvidia states, however, that following the acquisition, Hugging Face will retain its status as an open platform. Developers will be able to choose models, frameworks, cloud services and computing platforms at their discretion, and using Nvidia’s infrastructure will not be a prerequisite for working with the platform.
What the deal brings to Nvidia
The acquisition of Hugging Face gives Nvidia more direct access to the developer community that is shaping the market for open AI models and applications. This is particularly important against the backdrop of the industry’s shift from developing large proprietary models towards the wider use of open and customisable systems.
For Nvidia, this strategy could mean expanding the sources of future demand for computing infrastructure. Reuters notes that open models are seen as a more affordable alternative to the proprietary systems of companies such as OpenAI and Anthropic.
At the same time, the deal creates a potential conflict of interest: Nvidia will now own a platform that is supposed to serve developers regardless of the hardware they use. Analysts are already pointing to the risk that the company may favour its own hardware infrastructure, although Nvidia publicly promises to maintain Hugging Face’s neutrality, Reuters notes.
Thus, the acquisition of Hugging Face represents not only Nvidia’s largest technology deal to date, but also an attempt to establish a foothold at the next level of the AI market — where models are created, distributed and deployed, and which ultimately require computing power.
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