Nvidia Agrees To Acquire Hugging Face in USD 13 Billion Deal To Boost Open-Source AI

Nvidia has agreed to acquire Hugging Face, the prominent open-source artificial intelligence developer platform, in a deal valued at approximately USD 13 billion. The acquisition, announced Thursday, marks the chipmaker's largest outright purchase to date and signals an aggressive strategic expansion from semiconductor hardware into software distribution and developer infrastructure. The transaction is expected to close in 2027, subject to customary regulatory approvals, and under the terms of the agreement, Hugging Face will continue to operate under its existing brand and maintain its platform independence, according to a report.

A Major Bet On Open-Weight AI

Hugging Face serves as the primary collaborative repository for the open AI community, hosting more than 3 million models, 500,000 datasets, and 1 million applications. The platform is used by over 18 million developers and roughly 200,000 organizations worldwide to test, modify, and deploy machine learning models. Why Is Nvidia Reportedly Buying Hugging Face for Nearly USD 13 Billion?.

Nvidia Agrees to Acquire Hugging Face

Unlike proprietary, closed-source models from developers such as OpenAI and Anthropic, open-weight architectures allow engineers and academic researchers to download and execute software directly on their own computing clusters.

Nvidia Chief Executive Jensen Huang characterized the deal as an effort to accelerate adoption across industries, including healthcare, manufacturing, and public education. SpaceX, Nvidia Develop Space-optimized AI System for Orbital Launch Next Year, Says Elon Musk.

"Open weights enable start-ups, established businesses, universities and public institutions to build on advanced capabilities without training every model from scratch or paying frontier-model prices for every task," Huang said in a statement.

Independence And Ecosystem Commitments

Addressing potential concerns regarding platform neutrality, Nvidia stated that Hugging Face will remain open to the broader ecosystem. The company pledged that developers will retain full autonomy to run models on competing processors and across alternative cloud providers without mandatory ties to Nvidia hardware.

Hugging Face Chief Executive Clément Delangue stated that his company initiated the acquisition talks during the summer, viewing Nvidia as an aligned partner to scale its infrastructure.

The sale represents a notable shift for the startup, which had previously turned down a USD 500 million investment offer from Nvidia at a USD 7 billion valuation to safeguard its operational autonomy.

Strategic Shift And Market Context

While Nvidia's rapid growth has been driven by surging global demand for its graphic processing units (GPUs), the company has faced longer-term headwinds as its largest customers, including Google, Amazon, and Meta, accelerate internal development of proprietary AI chips.

By securing Hugging Face, Nvidia integrates directly into the software workflow of millions of practitioners, broadening the demand for open-source computing power that typically runs on its graphics architectures.

Financially, the USD 13 billion price tag reflects a high revenue multiple, with Hugging Face generating an estimated USD 150 million in annualized revenue. The purchase substantially surpasses Nvidia's previous record acquisition, its USD 6.9 billion buyout of networking specialist Mellanox Technologies in 2020.

Regulatory Headwinds Ahead

Given Nvidia's market capitalization and dominant market share in artificial intelligence computing, the proposed buyout is expected to draw close scrutiny from antitrust regulators in the United States, Europe, and other major jurisdictions.

Critics within the open-source community have raised questions about market concentration, pointing to the risk of single-vendor influence over foundational software repositories. Nvidia enterprise AI executives acknowledged the regulatory hurdles ahead but maintained that the deal will receive approval by reinforcing accessibility and open ecosystem development.

(The above story first appeared on LatestLY on Sep 03, 2026 09:08 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).