Nvidia confirms it is buying Hugging Face for $12.93bn and promises to leave it open

Nvidia is buying Hugging Face for $12.93bn, confirming a deal that had been reported for the past week. The chipmaker is acquiring the platform where much of the open-source AI community stores and shares its models, while promising to leave the platform itself largely unchanged.

The price values the ten-year-old company at roughly 86 times its $150m in annualised revenue. Hugging Face has raised $395m since its founding, most recently $235m in 2023 in a round led by Salesforce Ventures, which valued the company at $4.5bn.

Jensen Huang has committed to openness as plainly as possible. “Hugging Face will remain an open platform for the entire AI ecosystem,” the Nvidia CEO said in a post on LinkedIn, adding that developers “will choose the models they want, the frameworks they want, the clouds and inference service providers they want and the computing platforms they want”.

That last part matters. Hugging Face runs across different accelerators and cloud providers, including hardware that competes with Nvidia’s, and its neutrality is a big reason 18 million developers and 200,000 companies use the platform.

The scale helps explain the price. Hugging Face hosts three million models, a million applications and half a million datasets, making it the default starting point for many developers looking to build with open AI models.

The deal is also by far the largest acquisition Nvidia has made. Its previous record was the $6.9bn it paid for Mellanox in 2019, less than half the value of this transaction.

Nvidia already has a significant presence on Hugging Face. The company describes itself as the platform’s largest contributor of open models and data, with more than 500 models and 250 datasets published there.

Clement Delangue has described the sale as a decision about resources. The platform “needs more compute, more support, more collaboration, and more visibility. That’s why we went to talk to Jensen,” the co-founder said.

Delangue and the rest of the founding team will stay on. Hugging Face will keep its brand and leadership, an arrangement that makes sense when the thing being acquired is as much a community as a product.

The company had already turned Nvidia down once. It rejected a $500m Nvidia investment that valued it at $7bn before running a process that eventually produced a price close to twice that amount.

Robotics has become another part of Hugging Face’s business. The company has moved into hardware with the Reachy Mini and a $399 open-source robot duck, while co-founder Thomas Wolf has been discussing that direction rather than focusing on the acquisition itself.

The awkward question is structural rather than about Nvidia’s intentions. Hugging Face’s most valuable asset is its position as a platform that belongs to nobody, while its new owner is the company whose chips power much of the AI industry represented on it.

Nvidia has been building its position around open models for some time. It runs an open AI security alliance and publishes its own open-weight model families, leaving distribution as one of the major pieces it did not control.

Hugging Face has also been moving further into Nvidia’s territory. It sells enterprise storage that has replaced S3 for some customers and offers managed GPU compute, both of which sit naturally alongside a chipmaker’s broader cloud ambitions.

Regulators will look closely at that overlap. A deal of this size requires clearance in multiple jurisdictions, and neither company has yet provided a closing date or outlined the conditions it expects to meet.

Nvidia has faced a similar problem before, and lost. Its $40bn attempt to buy Arm collapsed in 2022 after competition authorities on both sides of the Atlantic objected to a chip designer being owned by one of its customers. The structure of the Hugging Face deal creates a related question.

The community will have its own way of judging the acquisition. If models and tools built for competing accelerators remain as easy to publish and discover as they are today, Nvidia’s commitments will have held. If that changes, the announcement will not matter much.

There is also a payday for some of the people who backed Hugging Face early. Kevin Durant’s $250,000 stake was reported to be worth around $60m before the final acquisition price was agreed.