Nvidia to Acquire Hugging Face for $12.93B, Deal Expected to Close H1 2027
Nvidia, which already dominates the chips used to train and run AI models, gains control over the most widely used open-source AI model and dataset hub. Questions remain about whether Hugging Face's neutral open-source reputation survives under ownership by a company with direct commercial interests in the hardware the models run on.
Nvidia officially announced on September 3, 2026 that it will acquire Hugging Face for $12,930,300,000, with approximately $11.9 billion going to stockholders and up to $1 billion reserved for employee retention equity. The deal is expected to close in the first half of 2027, pending regulatory approvals. The price represents roughly 86 times Hugging Face's reported annualized revenue of approximately $150 million and about 2.9 times its $4.5 billion valuation from a 2023 funding round.
Hugging Face serves as a cloud repository for AI models, analogous to what GitHub is for conventional software, hosting over 3 million models, 500,000 datasets, 1 million applications, and more than 18 million developers from over 200,000 companies. Nvidia pledged that Hugging Face will remain an open, multi-cloud, multi-accelerator platform and that Nvidia compute will not be required to build or deploy on it. Nvidia describes itself as the largest contributor of open models and data to Hugging Face, having released more than 500 models and 250 open datasets on the platform.
Jensen Huang credited Clement Delangue for initiating the deal, and Nvidia stated the acquisition's goal is to speed up the spread of open models. Huang framed open models as advancing safety, cybersecurity, innovation, and sovereignty. Hugging Face had previously turned down a large Nvidia investment at a $7 billion valuation to maintain its independence, and deal talks began after Hugging Face received acquisition interest from another, unidentified suitor.
Nvidia's total equity investments have surged to $99 billion from $7 billion year-on-year. Nvidia also invested $3.5 billion in Taiwanese chipmaker MediaTek via convertible bonds, and Nvidia has invested over $40 billion in AI equity deals in 2026 alone, including a $30 billion OpenAI stake, which critics have called circular financing.
Reporting on September 4 placed Nvidia's $12.93 billion deal for Hugging Face within a broader investment surge: the company's total equity investments have reached $99 billion from $7 billion a year earlier, including a $3.5 billion commitment to Taiwanese chipmaker MediaTek.
CoreWeave called the Hugging Face price 'the clearest price anyone has put on the open model ecosystem' and said 'Open weights stopped being a hedge'.
Nvidia officially announced September 3 its acquisition of Hugging Face for $12,930,300,000, confirming a deal that had been reported but unacknowledged.
The terms allocate roughly $11.9 billion to stockholders and up to $1 billion for employee retention equity, with close expected in the first half of 2027 pending regulatory approvals. Nvidia pledged that Hugging Face will remain an open, multi-cloud platform and that Nvidia compute will not be required to build or deploy on it.
Bloomberg reported September 2 that Nvidia is discussing a $1 billion employee retention package as part of its reported $12.9 billion acquisition of Hugging Face, an AI model repository.
Neither Nvidia nor Hugging Face has publicly confirmed the deal.
Two analyses published August 28 added strategic rationale to the reported $12.9 billion Nvidia acquisition of Hugging Face.
Transformer News wrote that the deal is intended to help Nvidia compete against closed-source AI model developers. A separate analysis framed it as Nvidia's move to keep open-weight model developers tied to its hardware as hyperscalers including Google, Amazon, Microsoft, and OpenAI build custom chips for their own models, and counted over 3 million open-weight models on Hugging Face's platform.
The Information reported August 27 that Nvidia agreed to acquire Hugging Face, the primary platform for hosting and sharing AI models, for $12.9 billion, roughly 86 times the company's annualized revenue of approximately $150 million.
Neither company confirmed the deal. CNBC reported that talks began after Hugging Face received acquisition interest from an unidentified third party and that the company engaged a bank to evaluate bidder interest. Nvidia had previously backed Hugging Face at a $4.5 billion valuation in 2023 and offered $500 million for a stake at a $7 billion valuation earlier in 2026, which Hugging Face rejected.
The Information reports Nvidia expects roughly 25% of its revenue next year from AI labs it financially supports
Hugging Face's annualized revenue reported at over $150 million after a 50% jump in two months
Hugging Face reported to be exploring a sale above $13 billion, nearly triple its $4.5 billion Series D valuation
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