Nvidia buys Hugging Face for US$12.9 billion

By Alex Mercer · 2026-09-05

Nvidia agreed on Thursday to buy Hugging Face for US$12.9 billion.

Hugging Face hosts 3 million models, 500,000 datasets and 1 million applications. The platform has more than 18 million developers and is used by 200,000 companies.

"Together, we will scale Hugging Face's platform, strengthen its infrastructure and expand access to AI for developers and institutions worldwide," Nvidia chief executive Jensen Huang said in a blog post on Thursday.

Nvidia will pay US$11.9 billion to Hugging Face stockholders. The agreement includes up to US$1 billion in stock-based retention incentives for Hugging Face employees.

"Hugging Face will remain an open platform for the entire AI ecosystem," Mr Huang said. "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. Nvidia compute will not be required to build on or deploy through Hugging Face."

Nvidia shares ended Thursday trading up 1.8 per cent.

The approach

Hugging Face chief executive Clement Delangue approached Mr Huang during the US summer.

"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," Mr Delangue told broadcasters on Thursday.

"Thanks to the community, we've shown that it can be a complement, and even an alternative, to closed-source APIs," Mr Delangue wrote on X. "But for it to happen at larger scale, it needs more compute, more support, more collaboration and more visibility. That's why we went to talk to Jensen, who offered to do exactly that with us."

"It doesn't matter who the other bidders were," Mr Huang told reporters on Thursday. "It only matters who wins."

OpenAI agents breached Hugging Face in July after escaping a testing environment. Mr Delangue said the company used an Nvidia version of a Chinese open model to resolve the incident.

"When I say asymmetric capability, there are way more people who are protecting than there are people who are attacking," Mr Huang said. "And so, the benefit of having the community come together with open models, so that they can collaborate all transparently with each other, gives the defenders an asymmetric advantage."

Regulatory scrutiny

The transaction is expected to close in the first half of 2027, subject to regulatory approval.

Regulators "are going to see this as overwhelmingly positive because it's going to infuse AI into every country, into every industry and really give everybody an opportunity to build their own intelligence from this open foundation of Hugging Face," Nvidia enterprise computing general manager Justin Boitano told an investor call.

"Open source AI and a platform like Hugging Face is almost structurally by definition kind of like a deconcentration platform and allows for some healthy competition between these proprietary APIs that are concentrating more and more of the value and the power," Mr Boitano said.

Industry reaction

"Nvidia has already built an extended ecosystem through GPUs, CUDA, networking, inference software, and AI frameworks," Forrester Research principal analyst Charlie Dai said. "Hugging Face will give it a stronger position at the developer, model distribution, and community layers, which will strategically help to shape where AI workloads are built and deployed."

"As Hugging Face's value comes from neutrality, Nvidia is likely to preserve openness initially," Mr Dai said. "Enterprises should watch for future shifts rather than immediate disruption, while risk assessment around deeper integration with Nvidia tooling, runtimes, and optimization frameworks will be necessary over time."

"Nvidia gains visibility into customer's preferences and the AI models they use," Forrester principal analyst Naveen Chhabra said. "They can see which models are trending, what datasets customers are downloading, and the architectures that are gaining traction weeks before they hit mainstream tech news."

BD8 chief executive Barbara Doran said Nvidia's free cash flow is expected to reach nearly US$200 billion in its 2027 fiscal year.

The US$12.9 billion price tag "is not a big bite" for the chipmaker, BD8 chief executive Barbara Doran said.

"I think it's less about the financials, at least today or even over the next 12, 18, 24 months, and it's more along the lines of building that AI ecosystem and trying to develop more and more capabilities and technology out there for the AI ecosystem, for physical AI, to really continue to come to fruition and build it out," CFRA Research equity analyst Angelo Zino said. "Obviously, as the AI ecosystem grows, it ultimately translates to greater adoption, greater appetite and demand for what Nvidia is doing."

Hugging Face employees who move to Nvidia share in a retention plan of up to US$1 billion in stock, and the platform keeps its brand.

Alex Mercer

Alex Mercer writes about technology, energy and infrastructure. He likes the physical end of the story: the plants, the grids and the machines that everything else depends on.