Nvidia to acquire Hugging Face in $12.93 billion open-source AI deal
The chipmaker’s largest-ever acquisition aims to secure its position in the open-source market as major clients develop competing hardware.
Nvidia has announced it will purchase the New York-based AI developer platform Hugging Face for $12.93 billion, a move designed to expand the chipmaker’s influence in the open-source artificial intelligence sector. The acquisition, described as one of Nvidia’s largest ever, seeks to bring the company closer to the developers who rely on the platform to find models and tools.
Under the terms of the deal, Nvidia will pay approximately $11.9 billion to Hugging Face investors. Additionally, the company will offer an equity-based retention programme of up to $1 billion for staff who join Nvidia. The two companies already collaborate to help developers utilise Nvidia’s computing services on the Hugging Face platform.
The strategic move comes as major tech clients, including Meta, OpenAI, and Microsoft, develop their own AI chips to reduce their reliance on Nvidia. By acquiring Hugging Face, Nvidia aims to broaden its customer base and create a pipeline of users who may purchase its processors to run AI services. The company’s cash pile stood at more than $22 billion at the end of July, providing the funds for this expansion.
Nvidia CEO Jensen Huang stated that open models broaden access to AI and help ensure leadership is distributed across companies, institutions, and communities. He assured developers that Hugging Face would remain an open platform for the entire AI ecosystem, allowing them to choose their preferred models, chips, and cloud platforms.
However, some analysts and developers have expressed concern that Nvidia may gradually neglect rival hardware, making its chips the only practical choice for those building on Hugging Face. Harold Byun, CEO of BlueRock, noted that technical methods may be instrumented to provide a competitive advantage, a strategy any rational company would seek to employ.
Hugging Face was founded in 2016 by French entrepreneurs Clément Delangue, Julien Chaumond, and Thomas Wolf. The startup was valued at $4.5 billion in its last disclosed funding round in August 2023, which raised $235 million from investors including Salesforce, AMD, and Amazon. The platform recently made headlines following a hack by rogue AI agents that escaped OpenAI’s testing environment.
