Nvidia Confirms $12.93B Acquisition of Hugging Face

Nvidia has officially confirmed its acquisition of AI platform Hugging Face for $12.93 billion, putting an end to weeks of speculation about a potential deal between the two companies.

Hugging Face has become one of the most important platforms in the open AI ecosystem. Its platform currently hosts around three million models, one million applications and half a million datasets, serving more than 18 million developers worldwide.

Nvidia CEO Jensen Huang said the acquisition will not change Hugging Face’s commitment to open-source and open-weight artificial intelligence. Instead, he said the companies plan to expand access to AI tools for developers.

“Hugging Face will remain an open platform for the entire AI ecosystem,” Huang said. Developers will continue to be able to select their preferred models, frameworks, cloud providers, inference services and computing platforms. Nvidia hardware, he added, will not be mandatory for building or deploying projects through Hugging Face.

Nvidia’s Growing Role in Open AI

The acquisition gives Nvidia an even stronger position across the AI development ecosystem. The chipmaker already dominates the hardware used for AI training and inference, and controlling an open platform such as Hugging Face could help Nvidia create an ecosystem that works particularly well with its computing technology.

Huang also highlighted Nvidia’s existing relationship with Hugging Face. The company has released more than 500 models and 250 open datasets on the platform, with the goal of encouraging developers around the world to use them.

There could also be a business opportunity beyond software and models. Nvidia could potentially package its unused computing capacity with Hugging Face’s services and sell that capacity to enterprise customers.

Hugging Face’s Rapid Growth

Founded in 2016, Hugging Face has raised more than $395 million in funding, according to Crunchbase. Its most recent funding round came in 2023, when the company raised $235 million in a round led by Salesforce Ventures. Google, Amazon, IBM and Nvidia also participated.

Hugging Face CEO Clem Delangue said the company’s community had demonstrated that open AI could provide an alternative to closed-source APIs. However, scaling that vision requires more computing resources, support, collaboration and visibility.

That need ultimately led Delangue and his team to approach Huang, who offered to provide those resources.

The platform has continued to gain popularity as developers release new AI models at an increasing pace. According to the Financial Times, Hugging Face rejected a $500 million deal from Nvidia last year. The Information reported last month that the company was generating approximately $150 million in annualized revenue.

In a July interview with TechCrunch, Delangue said the company’s growth was bringing it close to profitability.

Nvidia Doubles Down on Open Models

The Hugging Face acquisition also fits into Nvidia’s broader push toward open AI models.

Huang has publicly supported open-weight models and previously co-signed a letter calling for greater adoption of open models to help strengthen the United States’ position against countries such as China in the AI race.

Nvidia is also putting significant money behind model development. The Wall Street Journal reported last month that Nvidia had reached a $6 billion deal with coding startup Poolside to develop open models. During its latest earnings call, Nvidia said it had invested more than $50 billion into AI frontier labs.

Huang has also argued that open models are becoming increasingly important for industries such as cybersecurity. He noted that many open models already run on Nvidia hardware and said frontier models are enabling cybersecurity companies to build large-scale, continuously operating autonomous systems.

The connection between Hugging Face and cybersecurity has already become notable. In July, Delangue said an Nvidia open model helped Hugging Face defend itself against cyberattacks after proprietary models failed to provide adequate protection. Just days earlier, OpenAI had acknowledged that one of its unreleased models had breached Hugging Face.

With the $12.93 billion acquisition now confirmed, Nvidia is taking another major step toward building a broader AI ecosystem around open models, developers and computing infrastructure.

Also read : OpenAI Faces 30 More Lawsuits Linked to Tumbler Ridge Shooting